Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

PRIVATE BUSINESS

LLOYDS BANK (MERGER) BILL (By Order)

NATIONAL BANK OF NEW ZEALAND LIMITED BILL (By Order)

Read a Second time and referred to the Examiners of Petitions for Private Bills

Oral Answers to Questions — SOCIAL SERVICES

Civil Defence

Mr. Gerald Bowden: asked the Secretary of State for Social Services whether he has had any meetings with the Royal College of Nursing to discuss civil defence matters; and what progress was made.

The Parliamentary Under-Secretary of State for Health and Social Security (Mr. John Patten): A preliminary draft of revised guidance to health authorities on civil defence planning was sent to the Royal College of Nursing last July. The college made a number of helpful comments which were discussed at a recent meeting between officials and representatives of the college.

Mr. Bowden: I thank my hon. Friend for that reply. When does he intend to publish the revised civil defence plans HD 771?

Mr. Patten: We are still discussing with the Royal College of Nursing and the British Medical Association the detailed provisions of the guidance. We hope to publish it as soon as it is available.

Mr. Meadowcroft: How far will it differentiate between attempting to pretend that there is a possibility of civil defence in a nuclear disaster as opposed to the proper need for civil defence in a non-nuclear disaster?

Mr. Patten: It will be a realistic document and we are having realistic discussions with both bodies.

Mr. Stern: In view of the extremely varied capability of the Soviet bloc in terms of biological and chemical weapons, has my right hon. Friend considered the need for isolation fever units in various parts of the country in relation to civil defence matters and whether these should be expanded, or at least maintained?

Mr. Patten: The Government are firmly committed to civil preparedness in time of emergency in warfare, whether conventional or nuclear. The National Health

Service must play its part in that civil preparedness and we keep the need for facilities such as those to which my hon. Friend refers constantly under review.

Limited List Prescribing

Mr. Fisher: asked the Secretary of State for Social Services what recent representations he has received on his proposals to limit the prescription of certain drugs.

Mr. Yeo: asked the Secretary of State for Social Services what further representations he has received regarding the Government's proposals to limit the list of drugs available on National Health Service prescriptions.

The Secretary of State for Social Services (Mr. Norman Fowler): I am now considering the results of the consultation, following my announcement in the House in November, together with the advice of the group of independent experts consulted by my Chief Medical Officer. I hope to make a statement on the final list shortly.

Mr. Fisher: Do not all those representations, including those by the experts, tell the Secretary of State that he is creating two National Health Services, one for those who can pay and one for those who cannot? Is he not saying to people who have confidence in the drugs that they are using and who find that those drugs suit them and work for them that he knows best and that he will prescribe different drugs for those who cannot afford to pay? Will he now take away his prescription for those people and reconsider his proposals?

Mr. Fowler: No, I will not do that. Nor have we any intention of introducing a two-tier system. I have a responsibility to provide proper and sufficient drugs, and that responsibility I shall fulfil. That is why if we find a branded drug that cannot be replaced it will remain, but I ask the House to await my statement on the subject.

Mr. Yeo: Will my right hon. Friend condemn the tactics that appear to have been used by certain sections of the medical profession in attempting to frighten some of their patients — especially elderly patients — into believing that certain essential preparations will no longer be available under the NHS?

Mr. Fowler: The tactics employed in that campaign both by the profession and at times by the association that purports to represent the industry reflect no credit on either body. My frank advice to both would be to cool it and to await the statement. They will then find that many of the fears that they have raised are groundless.

Mr. Willie W. Hamilton: Is the Secretary of State not aware that there is much genuine concern, especially among older patients, that they will be denied the drugs to which they have hitherto had access? Does he not realise that he could have avoided all this trouble if he had gone through the normal processes of adequate consultation before announcing the change?

Mr. Fowler: With great respect, we have been consulting since November—

Mr. Fisher: Nonsense. Not with the BMA.

Mr. Fowler: The hon. Member for Stoke-on-Trent, Central (Mr. Fisher) says "Not with the BMA". That is because the BMA has decided that it does not wish to consult. That is therefore a somewhat ridiculous statement, even from the hon. Gentleman's point of view.
I put it to the hon. Member for Fife, Central (Mr. Hamilton) that the Labour party has a policy of indiscriminate generic substitution.

Mr. Fisher: Rubbish.

Mr. Fowler: That was certainly the policy until a few weeks ago. If there has been another change, I am sure that the House would be pleased to hear what the policy is now. On this whole subject the Opposition have no credibility whatsoever.

Mrs. Jill Knight: Will my right hon. Friend note that many hon. Members join the Royal College of Surgeons, the Royal College of Physicians and the pharmacists in their full support for producing a limited list and putting an end to the enormous waste of drugs in the NHS? Will my right hon. Friend assure the House that the money saved will be spent elsewhere in the NHS?

Mr. Fowler: Yes, I can give that assurance. Until now, I had always assumed that it was common ground between both sides of the House that we wanted to reduce the NHS drugs bill. Opposition Members talk about it, but they do not come forward with any proposals.

Mr. Donald Stewart: The agreement with the BMA that generic drugs should be used in place of the same drugs bearing expensive branded names is regarded as sensible. At the same time, however, will the Secretary of State adhere to the principle that doctors must be free to prescribe what they think is best for the patient?

Mr. Fowler: In my statement, I shall consider such points. The Government stand firmly by the principle and the approach that I have already set out, but, clearly, I do not want to close the door on any reasonable suggestions —and suggestions have been made, both by doctors and by hon. Members, that we will wish to consider.

Sir John Wells: Homoeopathic medicine provides, at one-tenth or one-thousandth of the cost, remedies that are for the most part wholly satisfactory to the patients. Will my right hon. Friend take that on board, and also the fact that the BMA thoroughly dislikes it?

Mr. Fowler: I have no proposals for a limited list in homoeopathic medicine. I know that my hon. Friend intends to give me a teach-in on the subject, to which I look forward with eagerness.

Mr. Madden: In the light of recent events, was it wise for the advisers on this issue to be requested to sign the Official Secrets Act? Will the right hon. Gentleman undertake to publish the advice and representations that he receives? If the overwhelming message that he has received by the end of the consultation process is that this is an undesirable attempt to introduce a two-tier NHS, will he undertake to withdraw the proposals altogether?

Mr. Fowler: No. We shall act on the advice that we are given. That is the whole purpose of setting up a team of independent outside experts to advise me. I must ask the hon. Gentleman to await my statement.

Sir Dudley Smith: Is my right hon. Friend aware that, because of the confusion and anxiety that has been caused, there is a strong feeling that the limited list ought to be for consultation? Will he introduce it as a list for consultation before bringing forward a statutory instrument?

Mr. Fowler: I am aware that my hon. Friend has a close knowledge of these matters. I made an

announcement to the House in November on how we were proceeding and I invited consultations and representations then. At some stage the House must reach a decision. The history of limiting the cost of drugs in the NHS during the past 10 or 20 years has been one of Governments evading action and simply using words. The Government intend to take action. I hope that that action will be reasonable and carry the support of my hon. Friend. The time has come for decisions.

Mr. Kennedy: Why does the Secretary of State not adopt the approach laid down in the Greenfield report, which would allow generic substitution with medical consent? Will he consider extending membership of the Acheson committee, which is advising him inter-departmentally, to take on board people in the medical profession who have shown a willingness to try to improve or move towards the generic system which both sides of the House want?

Mr. Fowler: I am not sure that both sides of the House want the type of indiscriminate generic substitution that the Greenfield committee suggested. The industry would regard such a proposal as damaging to its interests, as it would affect research-based jobs. The hon. Gentleman and his party must take that on board. With regard to the independent committee, the hon. Gentleman is under a misapprehension. Members of the committee are not what he regards as an inter-departmental committee of civil servants but doctors, pharmacists and people from universities. They are from outside government. Their examination has finished and I do not intend to extend it.

Mr. Galley: Although much of the debate has rightly concentrated on the unscrupulous activities of a minority of doctors, does my right hon. Friend share my anxiety about the effect on pharmacists? Is he able to give us some assurances about compensation for stock losses?

Mr. Fowler: I am aware of my hon. Friend's interest in this matter. Pharmacists and their stocks will be considered in the statement. I understand, however, that many pharmacists broadly support the Government's action.

Mr. Meacher: As the Secretary of State's bungling of the issue has been so ham-fisted as to turn off the British Medical Association and the Government's standing medical advisory committee, will he now at least have the grace to recognise that a limited list is acceptable only if doctors agree that it covers the full range of clinical needs—

Mr. John Patten: What is Labour's policy?

Mr. Meacher: This is our policy. Does the right hon. Gentleman agree that the limited list is acceptable only if it includes generic substitutes whenever possible, if it applies in the private sector as well as in the NHS, if it is not implemented over-rigidly and if it is subject to regular review by a qualified, representative and independent body that represents all of the relevant interests? Does he or does he not accept those criteria?

Mr. Fowler: No, I do not accept those criteria. First, because the Labour party's policy — [HON. MEMBERS: "What about the Government's policy?"] With respect, the hon. Member for Oldham, West (Mr. Meacher) asked me to comment on the policy that he has just put forward. That policy would do immense damage to the industry and


would be opposed by the research-based industry. No Government want that. Secondly, if the hon. Gentleman believes so firmly in this policy why, when in government, did his party do absolutely nothing about the drugs bill? Thirdly, the hon. Gentleman is utterly inaccurate about the advisory committee. Three of the royal colleges support our policy. The Government are acting, and all the Opposition are good for is words and hot air.

Wrightington Hospital, Lancashire (Children's Ward)

Mr. Robert Atkins: asked the Secretary of State for Social Services when he expects to make a definitive statement on the future of the children's ward at Wrightington hospital, Lancashire.

Mr. John Patten: We have not been able to agree to the region's proposal for closure. A decision will not be made until we are satisfied that any revised proposals bring clear benefits to patients.

Mr. Atkins: I am grateful for my hon. Friend's welcome assurance that the children's rheumatological unit will not be broken up at Wrightington hospital. Will he give a further assurance that if the feasibility study into transferring that unit to, for example, the Royal Preston hospital is not a success, the obvious answer will be to retain a ward with a small number of beds at Wrightington hospital? Does he recognise how urgent the matter is, bearing in mind the time that it has taken to reach a decision, and the fact that people do not know what the future holds?

Mr. Patten: For the avoidance of doubt, I should not want my hon. Friend to think that I had said anything other than what I have just said, which will be recorded in Hansard. That is the extent of my assurances. The regional health authority, the district health authority and the Department will consider carefully all proposals for the welfare of the children who are now being cared for in that ward in that hospital.

Mr. Colin Shepherd: Will my hon. Friend recall that the interest in the future of the Wrightington ward is wider than the area immediately around Wrightington and the north-west because its distinction attracts children from other parts of the country? Will he bear in mind that it is undesirable to break up the successful team there, which is producing good, positive results?

Mr. Patten: I am aware of the excellent care that that ward has given to one of my hon. Friend's constituents. I shall certainly bear in mind everything that he has to say when making the difficult decisions that need to be taken about the future welfare of the children cared for there.

Cystic-fibrosis (Manchester)

Mr. Carter-Jones: asked the Secretary of State for Social Services if he will make a statement on the future of treatment for cysticfibrosis sufferers at the Royal Manchester children's hospital.

Mr. John Patten: Salford health authority is considering improving services for cystic-fibrosis sufferers and other patients at the Royal Manchester children's hospital by altering the present ward

arrangements. I am aware of the hon. Member's concern. If the health authority decides to press ahead with those proposals, it will consult locally.

Mr. Carter-Jones: I express gratitude to the Minister for his reply, but will he say how wide-ranging the consultations will be? In view of the national importance of the hospital, will he give a firm assurance that the decison will be made on medical grounds, not on the basis of administrative expediency?

Mr. Patten: The decision will be taken on medical grounds and in the best interests of the patients at present being served in the hospital. Consultation will be according to the well laid down pattern for consultation, with the local community and the community health council.

Mr. Tony Lloyd: Is the Minister aware that parents of children and staff in the affected ward at that hospital are worried about a possible break-up of the specialist teams and their skills, which have been built up for the treatment of cystic-fibrosis? Is he further aware that as it is a regional service — my constituents, for example, use it — the decision should not be in the hands of Salford district, but should more properly be shared equitably throughout the region?

Mr. Patten: Obviously, the regional health authority is considering the region-wide implications of proposals such as this which may be made in that hospital. We have been assured by the district health authority, which so far has made only possible proposals, that the treatment will simply be carried out in different parts of the hospital, and at the same level and largely by exactly the same staff as previously.

Mr. Sumberg: Is my hon. Friend aware that the matter causes widespread anxiety in all parts of Greater Manchester, including my constituency? Will he give an undertaking that if these proposals are implemented they will be kept under constant review, and that if they do not work, the decision can be reversed?

Mr. Patten: We would not permit any decision to alter the use of the ward, or to transfer patients from one ward to another, if we did not think that it was in the best interests of the young patients who are being helped in that ward.

Mr. Terry Lewis: The change that Salford health authority is considering is that a seven-day ward should he reduced to a five-day care ward. That is based on experience in recent months of similar changes in a surgical ward. However, the treatment of children with cystic-fibrosis is wholly different from the treatment of children in surgical wards. Many Opposition Members are desperately keen for the regional health authority to have a say in this and to make sure that any changes will be for the benefit of the children — [HON. MEMBERS: "Question."] Although the yobbos on the Conservative Benches may not like it, it has been said.

Mr. Patten: My right hon. and learned Friend the Minister for Health has written to the regional health authority about this matter following a meeting that he had shortly before Christmas with interested local Members of Parliament.

NHS (Expenditure Plans)

Mrs. Roe: asked the Secretary of State for Social Services by how much, in real terms, the Government's spending plans for the National Health Service in the next three years have increased since 1979, and if he will make a statement.

The Minister for Health (Mr. Kenneth Clarke): Expenditure on the NHS is planned to increase on average by 1 per cent. a year in real terms during the next three years. By the end of the period expenditure on the NHS would be about 24 per cent. higher in real terms than in 1978–79.

Mrs. Roe: I thank my right hon. and learned Friend for his reply. Have the Government made any real cuts in capital expenditure on the National Health Service?

Mr. Clarke: I am glad to say that capital expenditure is about 16 per cent. higher than it was under the Labour Government. The only Government who have cut the capital programme of the NHS and delayed new hospital building were the Labour Government in 1976.

Mr. Meadowcroft: Is it not dangerous to rely on national figures in the face of obvious shortages of staff and resources at local level? How much of the increase is taken up by the justifiable reduction in nurses' hours of work?

Mr. Clarke: The increase in nursing staff must reflect in part the changes in nurses' hours, but there has still been an absolute increase in the number of nurses. We also have increased demands on the budget. Nevertheless, the increased expenditure is real and is shown best by the way in which we now treat 650,000 more inpatients each year than the figure that was achieved during the last year of the Labour Government.

Mr. Butterfill: Will my right hon. and learned Friend confirm that his admirable pursuit of value for money in the Health Service will not lead him to put at risk the section of the population which receives blood transfusions? I understand that the output of the National Blood Products Laboratory at Elstree is inadequate fully to supply heat-treated factor VIII, which guards against the AIDS virus. Will he allow imported products to bypass the usual licensing procedures so that such supplies can be made available immediately, and so that we need not wait until April, when the Elstree laboratory will be able to supply them all?

Mr. Clarke: We are investing more than £30 million in Elstree to make Britain self-sufficient in blood products as quickly as possible. Some imported heat-treated factor VIII is already coming into the country, and Elstree is about to start manufacturing that product. We must ensure that no infected factor VIII is given to haemophiliacs, and we shall spare no expense and effort to do so.

Mr. Meacher: Is it not true that, as a percentage of gross national product, the NHS has had less spent on it this year than was spent on it five years ago? If the NHS is properly funded, why is it that this year more premature babies are being turned away from intensive care, that the death rate has increased because of a lack of renal dialysis for kidney patients, that there are growing delays for patients awaiting heart surgery, that there is lack of provision for drug addicts and for hypothermia, that

geriatric wards are being closed and that there is a breakdown of the emergency bed service in London? Does that suggest an improving service?

Mr. Clarke: The proportion of gross national product spent on the Health Service has increased from 4·8 to 5·6 per cent. under this Government. It is unfortunate that the hon. Gentleman should have listed the parts of the service where we all know that more needs to be done, and that he should make such selective quotations in an attempt to denigrate the achievements of a service which remains one of the best in the world and which is being improved by the Government.

Elderly Persons (Severe Weather)

Mr. Hardy: asked the Secretary of State for Social Services what steps he is taking to ensure that old and needy people are able to keep warm during the current severe weather conditions.

The Minister for Social Security (Mr. Tony Newton): We have both increased benefit rates in real terms for the least well-off—those on supplementary benefit — and extended entitlement to regular weekly additional help with heating costs, which now goes automatically to all supplementary pensioner householders over 65. In recent weeks we have also publicised the arrangements whereby one-off payments may be available to some supplementary beneficiaries in areas where the weather has been judged to be exceptionally severe.

Mr. Hardy: Is it not regrettable that at this time of very bitter weather Ministers are reported to be more concerned with preparations to reduce the cost of heating allowances than with meeting need? How many old people have died of cold this winter, and how many does the Minister think are currently at high risk?

Mr. Newton: I hope that the hon. Gentleman will acknowledge that Ministers are making a serious effort to improve the working of the supplementary benefit system as a whole, not least the effectiveness of the help that is given to all those who need our help. As to the rest of the hon. Gentleman's question, the concern that he feels about the effects of this severe weather is shared by all of us. We have been working closely with the Health Education Council and with Age Concern to make sure that all possible steps are taken to help old people.

Mr. Andrew Bowden: Does my hon. Friend recall that quite recently he described the extra heating allowance scheme as "weird"? Is not the scheme a farce? Does my hon. Friend also agree that, because of the appalling weather conditions from which we are now suffering, particularly in the south in areas like Brighton, many pensioners need heating to be on for 24 hours a day on account of the old buildings in which they live? Will he please look sympathetically at how this group can be helped when the bills start to arrive in March?

Mr. Newton: I am grateful to my hon. Friend for his support of my view that there is something strange about this regulation and that we need to look further at it in the context of the review. As to his wider point, I must emphasise that one of our aims has been greatly to extend heating additions to include all pensioners who are in receipt of supplementary benefit. There are now far more pensioners in receipt of regular help of this kind than there were when this Government came to office.

Mr. Fatchett: Is not the reality of the matter that, despite the bad weather of this winter, old people suffer every winter from having to make the choice between heating and other provisions in terms of their budget? Is it not about time that instead of shedding crocodile tears the Government came forward with a real system? Will the Minister go to his right hon. Friend the Chancellor of the Exchequer and say, "If the Government have money to give away in tax cuts to the rich, would it not be more sensible to make that money available to old-age pensioners so that they can look forward to other winters without this hardship and without these difficult conditions?"

Mr. Newton: Both I and my predecessors have already been to the Chancellor of the Exchequer to such effect that the amount spent on heating additions has risen from little over £100 million in 1979 to around £400 million. This represents a real increase of £140 million and has been directed at exactly the problem that the hon. Gentleman has raised.

Mr. McCrindle: Whatever the charitable reasons that may have led to the introduction of the severe weather payments, will my hon. Friend accept it from me that there are many old people who simply do not understand why they are not entitled to these payments when the weather appears to be just as severe for them as it is for their friends who live perhaps a few miles away and who are receiving these payments? Would not the best course be to scrap this well-intentioned idea and to merge any additional assistance during severe weather into heating allowances generally?

Mr. Newton: I am grateful to my hon. Friend for his suggestion. Obviously we shall take it into account when looking at this provision.

Mr. Meacher: Is the Minister aware that the exceptionally severe weather payments that he has been making are a farce because the benefits are too paltry, the trigger points are too low and the system is far too slow to operate? Is he also aware that each week this winter during the miners' strike the Central Electricity Generating Board has been paying out £40 million on expensive oil in place of coal and that the expenditure of that sum for one week, if it had been devoted to pensioners, would have fully protected them from extra fuel costs in this bitter weather?

Mr. Newton: I really think that it is time the hon. Gentleman stopped harping on about the miners' strike in this context. The purpose of the CEGB has been to make sure that old people can have some heat when the miners have been seeking to deny it to them.

Social Security Reviews

Mr. Nellist: asked the Secretary of State for Social Services when he expects to publish the social security reviews presently being conducted by his Department.

Mr. Kirkwood: asked the Secretary of State for Social Services when he expects to publish the result of his departmental review on the supplementary benefit system.

Mr. Fowler: I expect to announce the Government's conclusions on the review and proposals for change in the course of the next few months.

Mr. Nellist: When will the Secretary of State lift his perhaps justified secrecy about these reviews and confirm to working people that he has refused to include in them proposals to abolish the £10 Christmas bonus, the £30 death grant, the £25 maternity grant, other woefully inadequate housing and supplementary benefits and the ending of the right to supplementary benefit for 234,000 16 to 17-year-olds? On Thursday 28 February, will the right hon. Gentleman meet a delegation representing upwards of 5,000 youngsters who on that day will be outside this House demonstrating against his proposal to end supplementary benefit to unemployed teenagers?

Mr. Fowler: Before the hon. Gentleman brings a delegation to see me, it would probably be a better idea if he discovered what the proposals are. As he does not know, it would seem slightly premature to have the sort of demonstration that he wants. It is obvious that the hon. Gentleman is in one of his more reasonable moods, and I must tell him that there is no point in having a review if we reject options in advance. We are looking at all options in social security, and I have no intention whatsoever of confirming or denying the kind of rumours that are around at present, however wild they may be.

Mr. Kirkwood: Will the Secretary of State accept that in principle I and my hon. Friends wholeheartedly agree that a review is very much needed? However, is he aware that the constitution of the reviews has been very much Government-orientated, in that they do not contain very many independent experts, and that the time scale is extremely short? Will he assure us that the consultation process will allow adequate time for people to respond and that he will publish all the evidence, or at least summaries of it, which he receives in private, as distinct from public hearings, so that we can all consider the matter properly before legislation is introduced?

Mr. Fowler: There will, of course, be a period of time for consultation between the publication of the review and the time any legislation is introduced. As to outsiders, I must point out that the supplementary benefit review which the Labour Government carried out in 1978 was done entirely by departmental officials. We did not take that view, but felt that we should include outsiders. One has only to look at the pensions review to see how many independent outsiders were involved in that. What applied to that review applies to all the other reviews as well.

Mr. Nicholls: As the hon. Member for Coventry, South-East (Mr. Nellist) suggested that the pensioners' Christmas bonus might be abolished, will my right hon. Friend remind the House that that bonus was abolished for two years, and on both occasions by a Labour Government?

Mr. Fowler: My hon. Friend is absolutely right. There were two years in the 1970s when the Christmas bonus was abolished by Mrs. Barbara Castle when she was Secretary of State for Social Services. The only party which abolished the Christmas bonus was the Labour party.

Mr. Pavitt: Will the right hon. Gentleman reconsider what he said about the time scale? Does he realise that on 19 March he is the supremo of two of the major spending Departments? Therefore, his reviews should be published before the Budget, otherwise we shall be discussing a very nebulous approach to expenditure for the coming year.

Mr. Fowler: I doubt whether I shall be able to satisfy the hon. Gentleman on bringing out the proposals before the Budget. A moment ago I was urged to bring them out later rather than earlier. I hope that the proposals will be produced within the rough time scale of the Budget considerations, because I think that the hon. Gentleman has a fair point about the connection between the two.

Mr. John Townend: Will my right hon. Friend reassure Conservative Members that if the reviews, when published, show areas in which savings can be made, that cash will be used to reduce public expenditure rather than to increase benefits?

Mr. Fowler: If there are savings in any area, the Government will have the alternative of putting the money into other benefits or reducing public expenditure and raising tax thresholds. I must stress that the aim of these reviews is basically to make the best use of available resources and to channel such resources to people who most need them.

Mrs. Beckett: May we yet again press the Minister to publish the reviews themselves, because only by comparing the evidence he has received with the conclusions and proposals of the Government can we properly judge what the process of review has been? What assurance can the House or the country have that, even if we believe that the Government are not attempting to destroy the welfare state through these reviews, they will not do so by the inadvertent incompetence that is the hallmark of this Administration?

Mr. Fowler: On the last point, the hon. Lady will just have to wait and judge the proposals as they come. In regard to publication, the hon. Lady, with her knowledge of the review process, will know that all the proposals to be put forward will be Government proposals. There is no question of publishing separate review reports. Clearly, different issues are contained from those in the housing benefit review, which is under independent chairmanship and which the House will want to see.

Cold Climate Allowance

Mr. Bruce: asked the Secretary of State for Social Service how many representations he has received concerning cold climate allowance for Scotland and the North of England.

The Parliamentary Under-Secretary of State for Health and Social Security (Mr. Ray Whitney): Since the beginning of last year we have received about 80 letters on the subject of a cold climate allowance, including 11 from right hon. and hon. Members.

Mr. Bruce: Will the Minister recognise that the recent decision to give additional heating allowances to areas in the south of England because of cold weather was greeted with shock and outrage in the north of England and Scotland, where the weather is traditionally colder? Will he recognise that in the same week that one area in the south-west of England recorded a temperature of 55 deg F and got a cold climate allowance, Aviemore in Scotland, with a temperature of -6 deg F, did not? Does this not mean that the criteria should be reviewed and that cold weather areas should have a permanent allowance to take account of the higher costs of heating?

Mr. Whitney: The hon. Gentleman's question shows a misunderstanding of two issues — the cold climate

allowance and extra help for budgetary requirements when there are exceptional weather conditions. He should be aware that Governments of both complexions have rejected the concept of a cold climate allowance for several reasons, which he should understand. Various factors have an effect on supplementary benefit spending. Expenditure on heating is only one of those factors.
With regard to exceptional payments, the criteria have been established and are available in the Library. As my hon. Friend the Minister of State has said, these are under review as part of the general review of the supplementary benefit system.

Mr. McQuarrie: Surely my hon. Friend will accept that, despite what has been said in answer to previous questions, the cold climate allowance, as presently enforced, adversely affects parts of Scotland, particularly in Grampian and my region of Banff and Buchan, because of the severe weather they have to suffer. Can my hon. Friend give an undertaking that that point will be taken account of in the review, and that the needs of the north of Scotland will be carefully considered?

Mr. Whitney: I confirm that the exceptionally severe weather payments will be the subject of review. Again, my hon. Friend is confusing the concept of the cold climate allowance with budgetary help under exceptional conditions for variations of climate. In regard to the criteria, I remind the House that it is possible for payments to be made in Glasgow when average temperatures are higher than average temperatures obtaining, for example, in Birmingham and Suffolk.

Mr. James Hamilton: Is the Minister aware that people in Scotland and in the north of England are convinced that the decision to pay the allowance in the south of England was political? Was the decision taken because the people in Scotland and the north of England have consistently returned Labour Members of Parliament? Is the Minister prepared to make a statement on proper lines?

Mr. Whitney: As the hon. Gentleman should understand, that is an outrageous suggestion. I refer him to the regulations setting out these criteria, which are available in the Library if he would take the trouble to go and read them.

Health Authorities (Chairmen)

Mr. Meadowcroft: asked the Secretary of State for Social Services what account he takes of the political affiliations of regional health authority and district health authority chairmen when they are appointed.

Mr. Kenneth Clarke: Chairmen of health authorities are appointed for their personal qualities and not to represent particular interests. [HON. MEMBERS: "Oh."] We often do not know the political affiliations of chairmen and potential chairmen and we do not give undue weight to those affiliations when we know them.

Mr. Meadowcroft: The reaction of the House shows the cynicism with which we greet the right hon. and learned Gentleman's comments. Is he not aware that the current edition of the Hospital and Health Service Review says in its editorial that we all know that political appointments are made? Would it not be an idea to link


the operation of the Health Service and the health authorites with the inquiry into local government practices that was announced yesterday?

Mr. Clarke: I said that we do not give undue weight to political affiliations when we know them, because I know that the House would not accept that we do not pay regard to them. However, that is a minor factor in making appointments and we try to pick the best people. I think that we have a much better record of objectivity than our predecessors in the Labour Government.

Oral Answers to Questions — PRIME MINISTER

Engagements

Mr. Blair: asked the Prime Minister if she will list her official engagements for Tuesday 12 February.

The Prime Minister (Mrs. Margaret Thatcher): This morning I had meetings with ministerial colleages and others. In addition to my duties in the House I shall be having further meetings later today. This evening I hope to have an audience of Her Majesty The Queen.

Mr. Blair: Now that Clive Ponting has been acquitted, and a jury of ordinary men and women has reasserted the value of parliamentary democracy over ministerial deceit, will the Prime Minister give an assurance that this is the last time that we shall see a person in fear of his liberty for preferring to tell the truth on behalf of the people to telling lies on behalf of the Government?

The Prime Minister: Mr. Ponting was accused and duly acquitted by a court of law. That is a fundamental part of our constitution. It is not a variation from our democracy, but an example of it.

Mr. Onslow: While my right hon. Friend must be right to resist pressure for hasty reform of the Official Secrets Act on the basis of a single verdict, does she not agree that it is essential that Ministers and civil servants should be able to work together within an accepted framework of mutual confidence and trust? Will she give some consideration to setting up a special committee of experienced and responsible Privy Councillors to review the matter and report back to the House as soon as possible?

The Prime Minister: I agree with my hon. Friend that it is absolutely vital that there should be trust and confidence between Ministers and civil servants. I note that a former Prime Minister said in 1976:
there must be absolute confidence that papers and discussions that take place are kept within the circle to whom they are given." —[Official Report, 17 June 1976; Vol. 913, c. 739.] I, then in opposition, supported him.
I shall consider what my hon. Friend said about the Official Secrets Act, but I remind him that the Franks committee considered the Official Secrets Act, and that on the committee there were three Privy Councillors, the person who was later to be a Labour Home Secretary, and a number of other people. Later there was a White Paper upon that Act and later, in our time, there was a proposed Bill brought before the other place, which did not find favour in Parliament.

Mr. Kinnock: Confidence and trust between civil servants and Ministers is essential, but so is confidence and trust between the Government and the House of

Commons, and that is what is at stake here. Yesterday, a vetted jury unanimously concluded that Mr. Clive Ponting had not broken the law by exposing the attempts of Ministers to mislead Parliament and the public deliberately. Did the Prime Minister know about the proposed deception of Parliament, and if she did, did she endorse it? If she did not know about it, will she now condemn it in the strongest possible terms? What was her involvement in the decision to prosecute Mr. Ponting?

The Prime Minister: To take the last point first, as the right hon. Gentleman knows full well, Ministers have absolutely no role in deciding whether to prosecute. That is the duty of the Attorney-General and the Director of Public Prosecutions. Ministers had no role whatsoever in the prosecution.
With regard to the right hon. Gentleman's first point, may I make it quite clear that we have put a full account on record. I must make it clear that Ministers in power have always taken, and I hope will always take, the view that information that would have some security value to those who threaten our people or our territory is not released. Our first regard in considering whether to release intelligence information is the safety of Her Majesty's armed forces.

Mr. Kinnock: The right hon. Lady says now, and she has said to me before, that she was not involved in the decision to prosecute. Frankly, I do not believe the right hon. Lady—

Hon. Members: Withdraw.

Mr. Speaker: Order. The right hon. Gentleman is in order.

Mr. Kinnock: The right hon. Lady's domineering style of government forbids belief that she was not involved in an issue as important as this. Mr. Ponting testified on oath that his superiors had told him that it would be the end of the matter if he resigned from the Civil Service. Since prosecuting counsel in the trial said that it was not suggested that the disclosures damaged national security, will the Prime Minister tell us what issues of national security were at stake in the Ponting affair? What reasons, other than the Government's political convenience, motivated the prosecution of Clive Ponting?

The Prime Minister: I told the right hon. Gentleman, and I must ask him explicitly to accept what I said—[HON. MEMBERS: "No."]—that I was not involved in the decision to prosecute a particular person. The right hon. Gentleman knows that that is correct. I ask the right hon. Gentleman to accept that point, otherwise he is making a very grave accusation. Before I answer the second part of the right hon. Gentleman's question, I ask him to accept my word.

Mr. Kinnock: We have not had in writing nor have we had on any previous occasion or now an adequate explanation for the prosecution of Clive Ponting, in view of the fact that even prosecuting counsel said that no question of national security was involved in the decision to prosecute Clive Ponting. Until we get an adequate explanation, my words stand.

The Prime Minister: No. Mr. Speaker. I have said explicitly and before the whole House, to which I am answerable that I was not involved in the decision to prosecute Clive Ponting. I ask the right hon. Gentlman to accept that explicitly.

Sir Peter Blaker: Has my right hon. Friend's attention been drawn to the fact that Mr. Ponting said in court that there was a good military case for attacking the Belgrano and that he had seen nothing to support the contention that the ship was sunk to end a Peruvian peace plan? Does that not mean that the contention that the hon. Member for Linlithgow (Mr. Dalyell) wished to prove when he started his line of questioning was wrong?

The Prime Minister: The Belgrano was sunk for the protection of our armed forces, our naval forces, the Hermes and the Invincible. May I make it clear to everyone that, so long as this Government are in power, the protection of our armed forces will be our prime consideration, whatever the Opposition say. I challenge the Leader of the Opposition: will he or will he not accept my assurance? May I tell him that I was on holiday when the decision was taken?

Mr. David Steel: Has the Prime Minister noted the determination of the jury to distinguish clearly between loyalty to a Government and the security of the state? Will she therefore welcome, indeed rejoice at, this reaffirmation of basic democratic values by a cross-section of the British people and will she demand higher standards from her Ministers?

The Prime Minister: I accept the decision of the court —of course I do; I always have—but I stress that two things are vital. The first is that Ministers are able fully to trust civil servants. I hope that the right hon. Gentleman agrees with that and does not in any way endorse or condone the breach of trust that occurred.
Secondly, I wholly and utterly insist that there are some things in security and intelligence which, for the safety of our forces or the safety of the state, the Government must keep secret. To put it in specific terms:
The Government has concluded that information relating to security and intelligence matters is deserving of the highest protection whether or not it is classified. This is pre-eminently an area where the gradual accumulation of small items of information apparently trivial in themselves could eventually create a risk for the safety of an individual or constitute a serious threat to the interests of the nation as a whole.
That was the view of the last Labour Government when they were in power, set out in a White Paper brought before this House by the then Home Secretary in 1978. It is something that we endorse.
I again ask the right hon. Gentleman: will he accept the assurance I have given that I had nothing to do with the prosecution of Clive Ponting? If not, he is the smaller a man because of his refusal.

Mr. Ward: asked the Prime Minister if she will list her official engagements for Tuesday 12 February.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Ward: May I draw my right hon. Friend's attention to the announcement by the National Union of Teachers this lunch-time that it intends to call a series of strikes? Does she not find this a strange way for teachers to carry out their duties and responsibilities to the young people of this country?

The Prime Minister: I agree with my hon. Friend. Children are in the care of teachers and it is a tragedy if teachers do anything to jeopardise the future of children

in order to go on strike. But I must say that I do not believe that many teachers will go on strike. I think that they will prefer to look after their charges.

Mr. Dalyell: Who was it who altered Sir John Fieldhouse's official commander-in-chief's report without Sir John Fieldhouse's knowledge?

The Prime Minister: I understand from Admiral Fieldhouse that during the drafting of his dispatch at Northwood he queried the date in the sentence on the detection of the Belgrano but agreed that it should be left as 2 May in order to protect sensitive operational and intelligence information. The second of May was therefore the date in the dispatch that Admiral Fieldhouse submitted to the Ministry of Defence. It was not altered by officials there.

Sir John Farr: asked the Prime Minister if she will list her official engagements for 12 February.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Sir John Farr: In view of the rising costs of Trident, will my right hon. Friend consider whether there are new ways of ensuring that a far greater domestic content is included in the contract? Given the increasing cost of purchases from America, an additional input from the British end would be very helpful to British industry.

The Prime Minister: A very considerable part of the Trident order has been placed in Britain as, indeed, all the submarine orders have been. I shall see whether we can achieve anything more, but the whole Trident programme will give us far more deterrence than any other programme on which we could spend that same amount of money.

Dr. Owen: The Prime Minister is a Member of the House and is aware of the convention that when the record of the House is printed it is accurate. When that record has been shown to be inaccurate and statements have been made to the House that have subsequently been shown to be untrue, they have been corrected. Why has the Prime Minister not come to the House today to correct the many mistaken statements that have been made by her and her Ministers, the most recent of which was on 21 February 1984, and is reported in column 695 of Hansard. She said that all the facts had been revealed and went on to say:
All the facts are there. They support the Government's case."—[Official Report, 21 February, 1984; Vol. 54 c. 695.]
All the facts were not revealed. They do not support the Government's case. There are misleading statements on the record, and the Prime Minister owes it to the House to put the record straight.

The Prime Minister: The right hon. Gentleman wrote a very long letter to me in the autumn. I answered his allegations fully in my letter to him of 8 October. He replied to that, and I answered again on 16 November. I have also answered very extensive letters from other right hon. and hon. Members, and I believe — although I speak from memory — that some of them have been reproduced in Hansard.

Several Hon. Members: rose—

Mr. Speaker: I shall take the private notice question and then points of order.

Later—

Mr. Speaker: There is a point of order, but it must relate to the subject of Question Time, social services, or Prime Minister's questions.

Mr. Frank Cook: On a point of order, Mr. Speaker. I must seek your guidance and possibly even your protection. I am well aware, as a new Member, that I am unable to accuse any member of the Government of telling lies. Am I able to accuse any member of the Government of being unable to tell the difference?

Mr. Speaker: That is just the sort of point of order that I had hoped would not be made.

Mr. Allan Rogers: On a point of order, Mr. Speaker. Last Thursday my right hon. Friend the Leader of the Opposition invited you to look into the recent habit of the Prime Minister of reading lengthy statements during Question Time. I happen to have done a little research into this and it confirms what my right hon. Friend asserted last Thursday. I wonder whether you have had an opportunity to do so, Mr. Speaker?

Mr. Speaker: I have no responsibility for how questions are answered, or for the questions that are put to the Prime Minister or to any other hon. Member. That is entirely a matter for those concerned.

RAF Bandsmen (Accident)

Mr. Kevin McNamara: (by private notice) asked the Secretary of State for Defence if he will make a statement on the accident that occurred yesterday in Germany to the 1st Battalion RAF Bandsmen and the subsequent death of many of the bandsmen involved.

The Secretary of State for Defence (Mr. Michael Heseltine): Yesterday afternoon on the E6 autobahn near Langenbruck in Germany a coach—

Mr. Dennis Skinner: On a point of order, Mr. Speaker. Is this true or false?

Mr. Speaker: Order. That is a foolish question. This is a very serious matter.

Mr. Heseltine: Yesterday afternoon, on the E6 autobahn near Langenbruck in Germany, a coach carrying the band of RAF Germany collided with an oil tanker. [Interruption.] It is with the greatest regret that I have to inform the House that in the fire which immediately ensued, the band's Director of Music, Squadron Leader C. R. Tomsett, 17 bandsmen and the civilian driver of the coach died. [Interruption.] A further two bandsmen are very seriously ill and the condition of three others is giving cause for concern. All next of kin have now been informed and arrangements have been made to fly those next of kin who wish, to Ingolstadt, where the injured are in hospital.
Following this tragic accident, an investigation into its cause has been put in hand jointly by the RAF police and the German civil police. In addition, an RAF board of inquiry has been convened but will await the outcome of

the police investigations before completing its own assessment of the accident. I know that the whole House will wish to join me in expressing our deepest sympathy to the families of all those so tragically killed and injured in this terrible accident.

Mr. McNamara: We on this side of the House join in the sympathy expressed by the Minister to all the families of the people bereaved and of the injured, and in particular to the RAF as a service, because this band was well-known, respected and loved by people within and without the service.
May I ask the Secretary of State two questions? When does he expect the preliminary inquiry to be completed, and will it be published? Secondly, will he also publish the report of the RAF board of inquiry when it has completed its investigation? Finally, will he convey to the German civil authorities the thanks of the House and of the British people for the splendid and quick way in which they came to the aid of those who were tragically harmed in this accident?

Mr. Heseltine: I am most grateful to the hon. Gentleman. I will certainly ensure that his views are passed on to the appropriate people.
I do not have a date by which to expect the report of the German civil police inquiry, but I am sure that it will proceed with dispatch, and I will ensure that the House is kept as fully informed as I can.

Mr. Paddy Ashdown: Will the Secretary of State please take this opportunity to convey the deepest regrets and condolences of my right hon. and hon. Friends to the families of those concerned?

Mr. Heseltine: Yes, of course I will do so.

University Hospital of Wales

The Secretary of State for Wales (Mr. Nicholas Edwards): With permission, Mr. Speaker, I wish to make a statement in view of a large number of wild allegations that have been published on the subject of the defects at the University Hospital of Wales, known as the Heath hospital.
The hospital was planned in the 1950s by the board of governors of the United Cardiff Hospitals. Messrs S. W. Milburn and Partners were appointed architects and Messrs W. S. Atkins and Partners engineers in 1961. F. G. Minter and Sons Ltd. were appointed principal contractors for the main works in 1966.
The hospital was constructed between 1966 and 1972. Some faults, mainly arising from work carried out in the period 1966 to 1969, began to become apparent in December 1973 and in 1974. In the meantime, the hospital had been handed over to the Welsh Hospital Board in October 1970 and became the responsibility of the new South Glamorgan area health authority on reorganisation in 1974. The rights and liabilities of the Welsh Hospital Board passed to the Welsh Health Technical Services Organisation at the same time. The architect signed the final certificate in November 1975.
The issue of this certificate was an event of crucial significance, as it precluded claims against the contractors in contract or in tort in respect of defects patent at the time. At that stage, WHTSO took no specific steps to protect its legal position and that of the taxpayer. Counsel notes that the AHA and WHTSO had become much concerned with the state of the concrete by 1976. In February 1977, a general property survey by the South Glamorgan health authority also led to concern at the condition of the mosaic cladding. WHTSO commissioned Ove Arup and Partners to carry out a survey. While that report was awaited, the only legal action that was in hand was the defence by WHTSO of a claim by F. G. Minter Ltd. and subcontractors Drake and Scull Ltd., who were seeking to recover finance charges under the terms of their building agreements. Consideration was given to the inclusion of the mosaic defects as a counter-claim against Minters' finance charges claim, but counsel advised in July 1977 that such a counter-claim could not be sustained. Under the traditional conventions, which have been strictly observed, I have no means of knowing what consideration my predecessors gave to the problem of the Heath, but I have been informed that no other legal action was taken before 1979 to protect the interests of the taxpayer.
Ove Arup's first report was received in November 1978, and having reported defects in the concrete during the course of its mosaic study it was further commissioned to carry out remedial and survey work on the concrete. The full extent of the mosaic defects having now been clearly identified, WHTSO commissioned Bickerdike Allen Partners in January 1979 to advise, and they reported in April 1979.
That report identified for the first time a possible claim against the architects. The first reference to counsel was on 12 July 1979 when, among other matters, the question of limitations was considered. Following that meeting with counsel, Bickerdike Allen prepared a further report that was received in November 1979 and was concerned with responsibilities and liabilities. Meanwhile, counsel had

been instructed in October to settle a draft writ and statement of claim against the Milburn partnership, and in the instruction to counsel the need for urgency was emphasised. Counsel settled notices of arbitration and an endorsement for the writ by telex on 17 December 1979 and the writ issued the same day.
Allegations have been made that the writ was out of time. The limitation period for a claim in contract was and is 12 years and the writ was clearly in time in that respect. The limitation period for a claim in negligence was and is six years. At the time of issue of the writ, that six-year period was regarded as running from the date when damage was discovered or was reasonably discoverable by the plaintiff, and on that basis the writ was in time for the claim in negligence also. The Pirelli decision of December 1982 moved the commencement of the six-year period back in time to the date of occurrence of damage, regardless of the date of discovery, and on that basis the claim in negligence would have failed if it had been pursued.
I turn now to the outcome of the legal action, details of which were given on 6 February in an answer to my hon. Friend the Member for Cardiff, Central (Mr. Grist). I shall deal with the allegation that there has been some kind of cover-up and the suggestion that in settling the action at about £300,000 the taxpayer has been negligently left with a liability for work costing £4 million—or, as is further alleged, as much as £8 million. The total cost of remedial works is about £4 million, of which about £2·8 million is attributable to structural defects other than the mosaic cladding. The Department's accounting officer reported to the PAC as long ago as 14 November 1983 counsel's advice that legal action about that should not be pursued. He had previously been cross-examined in some detail about this matter by the PAC on 17 March 1982.
The settlement that was finally reached on the mosaics will be published in the summary accounts of health authorities to be laid before the House of Commons as a paper. It was always the position that the Department's accounting officer would provide the PAC with any further information that it requires. There has therefore been no cover-up; nor, indeed could there have been. But in view of the outrageous and serious allegations that have been made on this subject, I have made available to the House the fullest possible information.
I turn now to the relationship between the Secretary of State and WHTSO—[Interruption.]

Mr. Speaker: Order. This is an important statement for those in Wales.

Mr. Edwards: I have been pressed by the Opposition to make a statement in reply to serious allegations.
The WHTSO is a special health authority established under the Health Service Acts. It is entitled in the conduct of litigation to act as a principal. It is not required to seek my approval to settlements of legal actions in which it may be engaged. It is normal for health authorities to engage in litigation and to reach settlements without reference to Ministers. But given the public and parliamentary interest in this case and the particular terms of the non-disclosure clause, I think that it would have been better had I personally been informed, particularly since one of my officials was a member of the WHTSO board. I regret that this was not done; and I am sure that, in these exceptional circumstances, I was right immediately to arrange that the fullest information should be given to Parliament.
I will deal with the suggestion that the cost of putting right the defects at the University Hospital of Wales may amount to as much as £8 million. As the House was told in answer to a parliamentary question on 1 February, the total cost of the remedial work is expected to amount to as little as under £4 million. The fullest possible information has, again, been given to the PAC. I regret that the hon. Member for Pontypool, who has been responsible for most of the wilder allegations, did not at any time check the facts with my Department.
I have had to answer this afternoon for events involving a hospital conceived in the 1940s, planned in the 1950s and built largely in the 1960s, before I entered the House. I have had to report on the absence of any protective legal measures during the whole period of the last Labour Government, on the outcome of complex legal actions that were initiated very soon after we came to office and on measures to repair damage that will be a burden on the health service for several years to come. I shall accept such responsibility as is mine. I trust that others will accept theirs.

Mr. Barry Jones: The right hon. Gentleman referred to the hon. Member for Pontypool. There is no such Member, and to that extent his statement was inaccurate. He was, in fact, referring to my hon. Friend the Member for Torfaen (Mr. Abse).
Is it not a fact that the right hon. Gentleman has been forced to make this statement because of the tenacious campaign of my hon. Friend the Member for Torfaen and because a South Wales Echo journalist, Mr. Tindle, made a prudent inquiry?
Is it not a fact that the Welsh health technical services organisation, WHTSO, struck a secret deal with the architects and engineers responsible for major defects at Wales's premier hospital, and that a settlement was reached last February? Amazingly, the terms of the settlement were to remain confidential between the parties and their legal advisers. The settlement sum was derisory. The cost of repairs is prohibitive.
Is it not a fact that a board member of the technical services organisation happens to be one of the right hon. Gentleman's right-hand men— [Interruption.]—and that that senior civil servant, an assistant secretary, was a signatory to the secret deal? In relation to one of the Secretary of State's most senior advisers, could it be possible that before, and since, the secret deal, at least over a period of 11 months, the matter was not mentioned once? This technical organisation is supposed to give value for money, one of the right hon. Gentleman's objectives.
May we be told when, in his crucial first six months in office—crucial from the legal point of view—the right hon. Gentleman met the technical services organisation and discussed the hospital's problems? If he did not meet his technical advisers, why did he not do so, considering that an important issue was being dealt with? It affected the capital building programme of Wales's hospital network.
Will the right hon. Gentleman publish the findings of his internal inquiry into the technical services organisation? Does the right hon. Gentleman agree that his

Permanent Secretary has stated that the technical services organisation is a special health authority answerable in the same terms as any other health authority?
The right hon. Gentleman told me that £4 million was the cost of remedial works. Has he omitted to include the cost—£1·8 million at 1981 prices—of restoring the flat roofs?
The right hon. Gentleman yesterday mentioned Bangor. Has he issued writs against the construction company that built the nurses' home, which has major problems? Is the IDC construction company the company that built the nurses' home? What is the scale of moneys that the right hon. Gentleman seeks as compensation?
Fundamentally, this issue spotlights the right hon. Gentleman's ministerial responsibility and his control over his Department. We think that he has failed abjectly. Why have we had to drag the information out of him? Is it not a sad spectacle to see the right hon. Gentleman saying that the technical services organisation is independent of him when it is directly responsible to him? Did not the right hon. Gentleman have seven valuable months in which to save Welsh taxpayers millions of pounds? It is pathetic of him to hide behind his ministerial predecessors—former Welsh Office Ministers who always face up to their responsibilities because they have nothing to be ashamed of. Does the right hon. Gentleman not recollect the Crichel Down case?
The right hon. Gentleman has been seen to have a feeble and faulty grip of affairs. He should go away and consider his position. The people of Wales have already lost confidence in him.

Mr. Edwards: Almost all the allegations made by the hon. Member for Torfaen (Mr. Abse) have been proved false and were dealt with in detail in my statement. The information was not confined to the legal advisers, and there was no secret deal. Indeed, it was WHTSO that inserted into the agreement the disclosure clause that ensured that the information would be provided to Parliament through the Public Accounts Committee, as is normal practice for confidential agreements of this kind. I repeat that there was no secret deal. The information would have been provided to the Public Accounts Committee, and indeed the summary of the financial settlement will appear in the normal course of events in a House of Commons paper that will appear in the next few weeks.
The hon. Member for Alyn and Deeside (Mr. Jones) inquired about the time scale on which legal action was taken. Legal action was initiated as a matter of urgency within weeks of this Conservative Government having come into their place. The hon. Gentleman asked me whether I was involved in the discussions of that settlement. I was indeed fully informed about the early stages of this matter which led up to the decision that we could not proceed with the claim for £3 million of the £4 million at issue, on the advice of counsel. The reasons for that have already been given to the Public Accounts Committee.
I was also involved in the decisions that led up to the renovation programme for the hospital. I can confirm that the cost of the programme is £4 million, and not more, as has been alleged, including the work on the roof. I confirm that writs have been issued in respect of the Bangor hospital.
The hon. Gentleman talks about control of the Department. I have to point out that legal action was initiated within weeks of the Government coming into office and was followed through energetically. No legal action at all was taken by WHTSO to protect its position in 1975 when the hon. Gentleman was responsible for the Health Service in Wales and when his right hon. and learned Friend the Member for Aberavon (Mr. Morris) was Secretary of State, and no legal action was taken to protect the position of the taxpayer for the five years between 1975 and their going out of office.

Sir Raymond Gower: Although it is true that this catalogue and history of disaster appears to have continued for two decades and during the terms in office of several Governments, are there not some signs that the earliest opportunity for effective remedial action might have occurred during the time of the Labour Government?

Mr. Edwards: The undoubtedly crucial event was the issuing of the architect's certificate in November 1975. Counsel has made it clear in his opinion, which is in the Library, that WHTSO could have taken action at that time to protect itself and the taxpayer, and that it failed to do so. It might have had good reasons for doing so, but I cannot tell at this stage because I have no access to the papers of my predecessor. That was undoubtedly a crucial event and it is also undoubted that serious defects were known from 1977 onwards and no effective legal action was taken until we came to power, when a meeting was held with counsel. Action was initiated in July 1979 onwards.

Mr. Leo Abse: As the Secretary of State regrets that I did not communicate with him when I could have had all of the information that I required, does he recall that, in May 1983, I tabled a parliamentary question asking him to give information about the surveyor's report of Ove Arup? He refused to do so because litigation was pending. As he refused to give information, how can he now complain that, until I and the South Wales Echo and the rest of the Welsh press prised the matter open, this secret deal was kept under wraps? Is it not clear from the right hon. Gentleman's statement that his passion, which is shared by the rest of the Government, for secrecy is now superseded by zeal for obfuscation? Having failed to put all the responsibility on civil servants, as he shamelessly did originally, he is now attempting, in the most convoluted manner, to persuade the House that some past Labour Administration was responsible, when he well knows that it was his own folly, neglect and lack of monitoring that led to millions of pounds being lost by taxpayers in Wales.

Mr. Edwards: When the hon. Gentleman tabled his first question, as he said, litigation was pending and information was not given to him for that reason. Of the £4 million, £3 million has already been accounted for fully to the Public Accounts Committee, and the accounting officer has been examined in detail on all aspects of this matter, giving details of the amounts and of legal opinions. The legal opinions have now been published. It will be clear to anyone who studies them that I was not responsible for any failure. Furthermore, it is quite clear that every proper legal step to pursue the matter was taken from the moment that the Government came to power. It is also

clear that the £1 million that remained outstanding and which was involved in the settlement, would have been reported in detail to the Public Accounts Committee in the normal course of events. Indeed, the settlement provided that it should be.

Several Hon. Members: rose—

Mr. Speaker: Order. I remind the House that there are two other statements and that we have a full day before us. I propose to call those hon. Members who were not called at Question Time yesterday when this matter was discussed.

Mr. Gwilym Jones: I am grateful to my right hon. Friend for making a statement. The hospital is in my constituency and the matter is of great concern in Cardiff. Since the news of the settlement came out, what approaches were made to my right hon. Friend or his office by the hon. Member for Torfaen (Mr. Abse) before he made allegations of a cover-up by my right hon. Friend? Does my right hon. Friend agree that those allegations have so obscured the pursuit of the heart of the matter that they ought to be considered in a full public inquiry by the Select Committee on Welsh Affairs?

Mr. Edwards: I would welcome any investigation by the Select Committee on Welsh Affairs. My hon. Friend is right. No approach was made by the hon. Member for Torfaen (Mr. Abse). There is no doubt that, in the circumstances that have arisen, I have given fuller disclosure to the House than has probably ever been given about a commercial contract of this type. I thought that it was absolutely right to give the fullest possible information to the House. That is why I made the statement today, and why I have laid so much information in the Library.

Mr. Alex Carlile: As the Secretary of State claims that all possible legal steps were taken as soon as the Conservative Government took office in 1979, will he please explain to the House why no writ was issued as soon as the Conservative Government took office, and why there was a delay from May to December 1979 before legal proceedings were started when his legal advisers should have known well that it was essential to issue a writ as soon as possible?

Mr. Edwards: On the basis of the law at the time, the writ was in time both at the time of its issue and now. The limitation period ran from the time when damage was discovered or was reasonably discoverable, which was the receipt of a letter on 18 December. The law as to the limitation before the Pirelli case was the decision in the Sparham Souter case, referred to in counsel's opinion on 5 March 1982. The Pirelli decision moved the start of the limitation period back in time to the date when damage occurred, regardless of when it was discovered. The writ was out of time as regards the claim of negligence after the issue of the Pirelli decision, but the writ has always been in time for the claim based on breach of contract, and it still is.

Mr. Donald Anderson: Cannot the Secretary of State see the contradiction between alleging in his own defence that WHTSO is an independent agency, and blaming my right hon. and learned Friend the Member for Aberavon (Mr. Morris) for his deficiencies during his period of office? Has he not admitted that he first heard of this settlement by reading the South Wales Echo, which


clearly shows gross mismanagement of his Department? Are there any other contracts to his knowledge with these non-disclosure clauses?

Mr. Edwards: No, it is not I who seeks to have this absurdly tight control over a health authority in the settlement of these matters. It is perfectly right that health authorities should negotiate the best possible terms, and I would not have sought to overrule their judgment, which was perfectly correct in the nature of the settlement. The only fault they made was in entering into a clause involving parliamentary disclosure, without consulting Ministers about the way in which that parliamentary disclosure should be made. Opposition Members are arguing that there should be the tightest possible control on WHTSO and that it should be run, as indeed it frequently was by my predecessors, in the tightest possible way. Yet although they ran it in that way, they apparently did not know about these matters or, at least, did not take steps to ensure that effective legal action was taken.

Mrs. Ann Clwyd: Does not the failure of the Secretary of State for Wales and the Welsh Office show a basic flaw in the reorganisation of the NHS in 1974? I was a member of the Welsh Hospital Board which started an investigation into this matter, but we were abolished by the Conservative Government, and the powers for the Health Service were taken over by the Welsh Office. Does not that failure by the right hon. Gentleman's Office underline, as we have always claimed, that the reorganisation was basically undemocratic and that the Welsh Office simply cannot exercise day-to-day control over the running of the Health Service in Wales?

Mr. Edwards: I think that when the hon. Lady studies the papers she will find that it was not the Welsh Office. Certainly I have no reason to think that WHTSO was necessarily responsible for a failure to recover. We have a story of a hospital first planned in the 1950s by local hospital boards, carried towards completion under the hospital board, of which the hon. Lady was a member, and taken over under the new organisation. The hospital was planned over a long period. There are lessons to be learnt about the general management of such capital programmes. Indeed, it was exactly about that subject that I made my maiden speech in 1970. The hon. Lady is quite wrong to conclude that the failure to recover and the loss that was incurred were the fault of the reorganisation of the Health Service. It was quite the contrary.

Mr. Donald Coleman: You will be aware, Mr. Speaker, of the exchanges in the House earlier this

afternoon about the withholding of information from the House. Will the Secretary of State, in addition to referring this matter to the Public Accounts Committee, invite the Chairman of the Select Committee on Welsh Affairs to carry out an in-depth investigation into this matter?

Mr. Edwards: I should find it hard to discover anything in common between this case and the other case that was referred to. The complaint in this case is that my official did not keep me informed about a matter, which I have since revealed in full to the House. I should certainly welcome any further investigation which the Welsh Affairs Select Committee chooses to make.

Mr. Alan Williams: Is it not remarkable and unbelievable for the Secretary of State, who is responsible for hospital services in Wales, to tell the House that, having been informed that negotiations about the £4 million deficit in a major hospital in Wales were in hand, he never bothered to establish their outcome in the next four and a half years? Does he recognise that it is no good coming to the House and saying that his officials should have informed him about the matter? Is it not a fact that virtually a year after the settlement he knew nothing of it until he read about it in the South Wales Echo last week? Does he recognise that on those considerations alone he is guilty of incredible incompetence? Is he further aware that the attempted cover-up that followed was made even more serious by the fact that a term of the settlement could, as you ruled, Mr. Speaker, have been a contempt of the House, had it been enforced? Finally, does he realise that the revelations of the past 10 days have left the clear impression in Wales of a Cabinet Minister who not only does not know what his Department is doing, but does not even try to find out?

Mr. Edwards: The right hon. Gentleman is wrong in almost every respect. I have already said that not only was I fully aware, but a full report had been given to the Public Accounts Committee of £3 million of this matter. The detailed clauses of the settlement were not disclosed to me. It was an error of judgment not to tell me of the particular disclosure clause. That was a matter about which Ministers should have been consulted. There was no attempt at a cover-up — indeed, WHTSO took specific action to ensure that provision for full disclosure to the PAC was included in the terms of the settlement. I believe that I am right in saying that it is for the PAC to decide whether it sits in camera and whether it accepts that the information given to it is confidential. Therefore, in my judgment this particular settlement could not have kept information from Parliament because the PAC could, if it had wished, have published all the information that it received.

Business of the House

The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): With permission, Mr. Speaker, I should like to make a short business statement.
The business for Monday 18 February will now be a debate on the sinking of the Belgrano, which will arise on a motion for the Adjournment of the House.
I shall announce a new date for the Second Reading of the London Regional Transport Bill at business questions on Thursday.

Mr. Neil Kinnock: May I tell the right hon. Gentleman that the debate on the Adjournment of the House is a completely inadequate way to deal with the matter? The Government have decided on a subject that entirely misses the point of having the debate on Monday. The debate must be about Minister's responses to questions from right hon. and hon. Members and from the Select Committee on Foreign Affairs on the circumstances surrounding the sinking of the General Belgrano. I commend that motion to the right hon. Gentleman. We should debate it on Monday if the House is properly to address the issues. They have become matters of vital importance, especially in the wake of the trial and acquittal of Clive Ponting.
I hope that we may have the right hon. Gentleman's co-operation in ensuring that, well before the debate, a full transcript of the proceedings of the trial is deposited in the House of Commons Library, as some difficulty has been experienced in obtaining that and we shall require his assistance in doing so.
Finally, if we debate the subject that I suggest it will provide the full opportunity necessary for a detailed account to be given of the precise reasons why a prosecution of Mr. Ponting was undertaken, in the light of the fact that apparently he was at no time accused of breaching national security.

Mr. Biffen: I am sure that the Leader of the Opposition will not be disappointed in his desire that the scope of the debate on Monday is drawn sufficiently wide to enable all the points that he has mentioned to be properly discussed. I have said that the Government wish the matter to be debated on a motion for the Adjournment of the House; he has demonstrated his anxiety on that point, and perhaps we can consider it through the usual channels. I shall see whether I can meet his point about the proceedings of the trial being made available in the Library.

Mr. A. J. Beith: Will the Minister of State for the Armed Forces be speaking in the debate on behalf of the Government, or will he be speaking from the Back Benches? If there is to be no change in his position, will whoever is speaking on behalf of the Government be doing so because the decision to deceive the House was taken much higher up than him?

Mr. Biffen: The easy accusation about deceit of the House is something that can best be left to Monday, when I have no doubt that it will be dealt with in the most authoritative fashion.

The Secretary of State for Defence (Mr. Michael Heseltine): Hear, hear.

Mr. Biffen: As to those who will be speaking in the debate, that has been concluded through the usual channels.

Mr. Dick Douglas: Will the Leader of the House give an undertaking that the document which has been called the "crown jewels" will be made available to the House — [HON. MEMBERS: "Why?"] Because it has been circulated to 12 good men and true. It may or may not be part of the transcript that may be available to the House. To have a realistic debate on this matter, there must be an all-pervading argument that the document should be available to hon. Members.

Mr. Biffen: I note what the hon. Gentleman says, but I must say in all candour that I can give no such undertaking.

Mr. John Gorst: May I suggest to my right hon. Friend that an all-embracing improvement would be a debate on the new concept in British politics that the ends justify the means?

Mr. Biffen: I note what my hon. Friend says, and I have sufficient regard for him to know that, if that is to be the thrust of his speech, he will be making it on Monday.

Dr. David Owen: Does the Leader of the House recognise that the leader of the Labour party spoke for many people in the House when he criticised the decision to have the debate on a motion for the Adjournment of the House and the scope of the debate? What should be discussed is the relationship of the House, Ministers and the Government. Hon. Members might have different views about the wisdom of sinking the Belgrano. Those two issues should not be clouded in the same debate.

Mr. Biffen: I thought that I gave a reasonably responsive answer to the Leader of the Opposition, and I shall not go beyond that now.

Mr. Nigel Spearing: Is it not a fact that Mr. Ponting has made it clear that he agrees with the Government's action in respect of the General Belgrano? If that is so, why is the scope of Monday's debate so wide? Why is it not focused on the action or otherwise of the Government in replying to the Select Committee's questions? Is the Leader of the House aware that the Select Committee on Foreign Affairs is considering these matters? Would it not be better to wait until it has reported before debating the wider issue?

Mr. Biffen: I think that the House will feel that it is important to debate this matter as speedily as possible. I also believe that the House would wish to have the debate on a broadly generous interpretation of all the factors that are relevant to this incident, and I am sure that we can fulfil that objective.

Several Hon. Members: rose—

Mr. Speaker: Order. We have another important statement, and we must not delay too long on this one.

Mr. Willie W. Hamilton: Will the right hon. Gentleman give the House a clear undertaking that he and the Government are responsible for the subject matter of the debate? Will he also give an undertaking that, since the Prime Minister is responsible for the security services, she will take part in the debate?

An Hon. Member: She will be on holiday.

Mr. Biffen: This is a Government motion, and with that go the consequences for the choice of topic and its title. But it is also a matter for discussion through the usual channels, and I am happy to say that that is what happened in this case.

Mr. Mark Hughes: Will the Leader of the House discuss with you, Mr. Speaker, whether a preferable motion would be that the House should set up a Committee to draw up the rules for impeachment and a bill of impeachment, because that is the last resort of this high court of Parliament against Ministers of the Crown who have misled the House?

Mr. Biffen: I think that I have been helpful to the House in the announcement I made concerning Monday's business, and I have no doubt that the point that the hon. Gentleman wishes to argue can reasonably be made on Monday.

Several Hon. Members: rose—

Mr. Speaker: Order. I will call one more hon. Member.

Mr. Chris Smith: If, in the opinion of the Director of Public Prosecutions and, presumably, of the Attorney-General, it was essential, in order that a jury of 12 men and women should have a full view of the circumstances surrounding the sinking of the General Belgrano, for it to see the document known as the "crown jewels", why is it impossible for right hon. and hon. Members to see that document before a debate on the matter?

Mr. Biffen: That point has already been made to me, and I cannot add to the answer that I gave.

Mr. Clive Ponting

The Attorney-General (Sir Michael Havers): With permission, Mr. Speaker, I would like to make a statement on my decision to prosecute Mr. Ponting. On 13 August 1984, certain facts were drawn to the attention of the Director of Public Prosecutions by the Ministry of Defence. In my absence, the Director consulted my hon. and learned Friend— [Laughter.]

Mr. Speaker: Order. This is not a matter for hilarity.

The Attorney-General: I wonder whether some of those who are jeering were on holiday in August last year. In my absence, the Director consulted my hon. and learned Friend the Solicitor-General the same day. On 16 August 1984, a report by the Ministry of Defence police was sent to the Director. My hon. and learned Friend and the Director considered that report on 17 August, and both formed the view that this was a serious breach of duty and trust by a senior civil servant. They decided to consult me and I was telephoned on the same day. The facts as reported by the Director were explained to me. The nature of the documents which had been communicated was described and I was told that the Director and the Solicitor-General advised a prosecution. Having considered the facts myself, I, too, decided that the case fell within my published guidelines and that there should be a prosecution.

Mr. Dennis Skinner: When did you ring Thatcher?

The Attorney-General: Neither I nor the Solicitor-General nor any of my officials sought the view of or consulted any other Minister, nor was the view of any other Minister conveyed to us before the decision was taken.

Mr. John Morris: rose—

Hon. Members: Apologise!

Mr. Speaker: Order. I called the shadow Attorney-General.

Mr. Morris: Does the Attorney-General realise that his brief deadpan statement—a 19-line calendar of events—is an insult to the House in the light of the crisis and the operation of this law, its provisions and the activities of Defence Ministers? Would it not also have been right for those Ministers to have lost not a moment in taking the House into their confidence about their personal intentions today? Does not the jury's verdict — a vetted jury, incidentally — reflect the view that Mr. Ponting's evidence either was true or could be true but that it also believed that Defence Ministers blatantly misinformed, or were prepared to misinform, the House? May I first ask — [Interruption.] —if the hon. Gentleman will allow me,—we still have freedom in this House—with your permission, Mr. Speaker, and that of the hon. Member for Banff and Buchan (Mr. McQuarrie) in the third row who is laughing, why in general there has been no prosecution for many years under section 2 of the Official Secrets Act when security is not involved and whether there has been a change in policy since the present Administration came into office? Secondly, may I express the hope, and indeed assume, that the Attorney-General will never again authorise a prosecution so long as section 2 continues in


existence in cases where there are no security implications? Thirdly, in agreeing to prosecute, did the Attorney-General bear in mind, first, the views expressed by the Lord Chancellor in 1979 about the need to 'have legislation capable of being enforced and the need to limit the extent of criminality and, as regards continuing the prosecution, the letter of Mr. Sam Silkin to The Times on 26 September about the difficulties of getting a true verdict in which he said:
however careful the trial judge"—
when so many issues might be canvassed—
and which no intelligent juror could easily dismiss from his mind and conscience"?
He warned the Attorney-General that at that late stage he might reconsider the case and allow events to take their course. Does the Attorney-General now regret not having heeded that advice?

The Attorney-General: The right hon. and learned Gentleman describes my statement as an insult to the House and says that I should have dealt with the activities of Defence Ministers. May I remind him and the House of the words that he used only yesterday when making a Standing Order No. 10 application:
the misuse of section 2 of the Official Secrets Act and whether the Attorney-General, in current circumstances, should have granted his consent to prosecute in the case of the Queen v. Ponting."—[Official Report, 11 February 1985; Vol. 73, c. 38.]
That is exactly what I have responded to today. The right hon. and learned Gentleman went on to make a number of points. He referred to the false conclusion by the jury. I do not follow why that amounts to a false conclusion by the jury. The jury's verdict was given on the particular facts of the case and does not establish, as I see it, any rule of law or any precedent in law. I shall continue to apply this law as it is, looking at each case on its particular merits. The right hon. and learned Gentleman then asked me to give an undertaking that I would never again authorise a prosecution under section 2 which does not involve security. That is a remarkable proposition. I have a duty to enforce the criminal law. I have no right, nor must I seek, to usurp the function of Parliament by effectively repealing legislation.

Mr. Norman St. John-Stevas: By refusing to accept the solemn word of the Prime Minister, now corroborated by the Attorney-General, that she took no part in this decision to bring the prosecution, has not the Leader of the Opposition done more to undermine respect for democracy than any other action in this affair and is it not time that he apologised to the House?

The Attorney-General: I regret very much what was said and repeated by the Leader of the Opposition. After having heard what I have said, I hope that he will offer the apology that my right hon. Friend deserves.

Mr. David Steel: May I ask the Attorney-General two questions? He says in his statement that he took the view that there had been a serious breach of duty and trust by a senior civil servant. In that case, why did he not proceed under the Civil Service disciplinary procedures? And was he aware before he took his decision, of the offer that had been made to Mr. Ponting that, should he resign the service, there would be no prosecution? My second point is that the last sentence of the Attorney-General's statement is very carefully worded, stating that neither he, nor the Solicitor-General

nor any of his officials were in touch with other Ministers before the decision was taken. That is quite consistent with the assurance given to us earlier by the Prime Minister. However, it does not exclude the possibility that Ministry of Defence Ministers were in touch by telephone with the Prime Minister, after he took his decision and before he acted on it, to get her approval.

The Attorney-General: I am quite unable to say what conversations, if any, took place. [HoN. MEMBERS: "Oh!"] But it has no relevance. The relevant factor is the decision that I reached, which I reached alone with the Solicitor-General and with the Director of Public Prosecutions and my officials. It was reached without any contact of any kind with any other Minister.

Mr. David Ashby: rose—

Mr. Steel: What about the first part of my question?

Mr. Ashby: Does my right hon. and learned Friend agree that, while defendants have a right of appeal against a perverse verdict the prosecution rightly, in my view, and in the view of many of us, does not have the right of appeal against a perverse verdict?

The Attorney-General: It would be quite wrong for me to comment in any way upon the verdict. May I deal with the other question that the right hon. Gentleman the Leader of the Liberal party put to me? I apologise for having forgotten it. Section 2 of the Official Secrets Act is not in existence only to protect national security. Civil servants, whatever their rank, have a special degree of responsibility imposed on them by the nature of their office and of their duties and by the confidence that is therefore reposed in them. Mr. Ponting was a senior officer and his breach of responsibility and trust was accordingly greater.

Mr. Tam Dalyell: Does the Attorney-General have any criticisms of the Ponting trial judge?

The Attorney-General: The only comment I would make about the Ponting trial judge is that I agree with his definition of the law.

Mr. Douglas Hogg: Will my right hon. and learned Friend agree that before this House proceeds to the beatification of Mr. Ponting we should do well to reflect that if senior civil servants want to stand on principle they would do well to resign their official position, make a public disclosure of what they want to disclose and thus openly invite prosecution rather than act in a covert, underhand and disreputable manner?

The Attorney-General: I note what my hon. Friend says.

Mr. Chris Smith: Will the Attorney-General expand on his answer to my hon. Friend the Member for Linlithgow (Mr. Dalyell) and tell the House what is his view of the judge's ruling that the interests of the state relate solely to the interests of the Government of the day? Is that not a very dangerous trend in British justice and is it not excellent that 12 ordinary people have said that they want none of it?

The Attorney-General: I think that it is a mistake to make the assumption that 12 ordinary people want none of it. There are so many circumstances that may affect a jury, but I have said already and I say again that I accept that the learned judge was right in the direction of law that he gave.

Mr. Peter Thomas: Could my right hon. and learned Friend tell the House who took the decision that the proper conduct of the prosecution in this case required the disclosure to the jury and to others who are participating in the case of the restricted document known as the "crown jewels"? Who authorised the disclosure and, as the document has been disclosed, can he give any valid reason why the Select Committee on Foreign Affairs, on the same basis as the jury saw that document, should not in accordance with its request be shown the document?

The Attorney-General: There was no intention by the prosecution to make any use of the document called the "crown jewels". The defending solicitor asked for a copy, rightly recognising that some of it might be of a very highly confidential nature. When the edited version was looked at, it was quite clear that it would give a very misleading impression. I then sought the authority of those responsible from a security point of view, and in particular the authority of my right hon. Friend the Secretary of State for Defence—because they were all defence matters—and asked whether I could use the whole document. I was then given that authority, which is why the whole of the "crown jewels", rather than a misleading part of it, was put before the jury. I cannot, of course, have responsibility for the Foreign Affairs Select Committee.

Mr. George Foulkes: Will the Attorney-General explain why on the one hand he decided to prosecute Clive Ponting for actions which did not prejudice national security while, on the other, he has not decided to prosecute Lord Lewin for revealing top secret information about the towed sonar array, which does prejudice national security?

The Attorney-General: As I said in a written answer only a few days ago, which the hon. Gentleman may not have seen, there is an investigation by the DPP into the allegations in respect of Lord Lewin.

Mr. Kenneth Warren: Does my right hon. and learned Friend accept that, while I fully understand the need to protect the security of the state, the time has surely come when we should examine, review and reform the Official Secrets Act 1911? Further, will he call on the Leader of the Opposition to withdraw his scandalous accusation against the Prime Minister?

The Attorney-General: If I may seek the indulgence of the House, when I sought the authority of those responsible for the security side of the "crown jewels", I should have added that the Secretary of State for Foreign and Commonwealth Affairs was also consulted. The reform of the Official Secrets Act cannot be a matter for me but must be a matter for my right hon. and learned Friend the Home Secretary.

Mr. David Young: Many of us are concerned that the Official Secrets Act is now being used less to protect national security than to protect the faces of Ministers. We in this House are concerned with the quality of information given to us by Ministers. In view of this jury verdict, will those in this House who really believe in law and order ensure that the rights of the House are safeguarded?

The Attorney-General: I think I have dealt with that point already, but I shall repeat it again. I found it interesting that the right hon. and learned Member for

Aberavon (Mr. Morris), who shadows me, said on the radio just after one o'clock that, with regard to the leaking, he did not endorse in any way what had been done. I welcome that statement from him.

Mr. Michael Mates: Will my right hon. and learned Friend confirm that, had Mr. Ponting genuinely felt that any Minister was about to act improperly, he had a perfectly good chain of communication leading to the Prime Minister's Office itself, through which he could properly have registered his complaints and fears without resorting to the lies and deceptions with which he breached the trust placed in him? Did Mr. Ponting take those steps, and what are they?

The Attorney-General: My hon. Friend is quite right. There is a recognised procedure, which Mr. Ponting did not follow in this case.

Mr. Eric S. Heffer: Did not two Ministers come here and deliberately tell untruths to the House of Commons? Is it not also true that Mr. Ponting decided that that was not good enough, and that his decision has been upheld by 12 men and women good and true? Is it not clear that if those Ministers involved had any decency whatever, and on the basis of our parliamentary traditions, they would resign from the Government forthwith? Does the Attorney-General also believe that the Government should take no notice of those Conservative Members who now want to introduce legislation that would make it impossible for decent people in future to tell the truth in the House of Commons?

The Attorney-General: I am sure that the hon. Gentleman will find that a useful dummy run for the speech that he will make next week.

Mr. Jonathan Sayeed: Does my right hon. and learned Friend agree that this case shows that, despite the scaremongering from the Opposition Benches, jury vetting has a useful part to play?

The Attorney-General: I have a feeling that that could be taken in one of two ways. It is of interest that the Crown did not challenge anyone but that Mr. Ponting, through his counsel, at a random selection, removed three potential jurors.

Mr. John Home Robertson: Now that the court has specifically found that the disclosure of certain information was not a breach of the Official Secrets Act, will the Attorney-General, in anticipation of next week's debate, confirm that he will not initiate a prosecution against anyone who similarly discloses relevant information to Members of this House?

The Attorney-General: I thought I had made it clear, but I repeat, that I shall continue to apply the law as it is, looking at each case on its own particular facts.

Mr. George Walden: Does my right hon. and learned Friend agree that in the longer term the ideals of more open government are unlikely to be promoted by the surreptitious activities of a distraught civil servant?

The Attorney-General: Probably the most important and damaging consequence is the risk that it may result in a loss of confidence between Ministers and civil servants.

Mr. Robert Maclennan: Does the Attorney-General accept that, in the light of the


verdict, his decision to prosecute must be regarded as an ineffective means of dealing with what he considered to be a serious breach of trust? That being so, where he believes that a risk to public security is involved, will he undertake to seek to rely, not on section 2 of the Official Secrets Act — long ago discredited — but on the other specific provisions of the Act which deal with matters of national security?

The Attorney-General: The problem is that there are none. For example, in practically every case in which I have granted my consent since 1979, there has either been a breach of security or information has been sent by a police officer to someone else, usually for corrupt purposes. In one case information was provided by an examiner in bankruptcy to a criminal, and that person had no right to be in possession of it. The question put to me must mean that no prosecution should be launched unless there is 100 per cent. certainty of the prosecution succeeding. To put such a question shows a total misconception of the duties of the prosecuting authorities.

Several Hon. Members: rose—

Mr. Speaker: Order. The House knows that there is to be a debate on this matter on Monday—

Hon. Members: No, there is not.

Mr. Speaker: Order. The Leader of the House has announced a debate. I shall allow questions to continue for another five minutes and I shall then call the right hon. and learned Member for Aberavon (Mr. Morris), the shadow Attorney-General.

Mr. W. Benyon: What worries so many of us is that the traditional trust and loyalty between Ministers and civil servants is being so gravely jeopardised. Will my right hon. and learned Friend point out to the Opposition leaders that if they were ever to regain power they would require that trust and loyalty which we expect?

The Attorney-General: I agree entirely. I was very interested in the passage that my right hon. Friend the Prime Minister read out to the House during Question Time.

Mr. D. N. Campbell-Savours: Did defence officials tell Mr. Ponting that if he resigned he would not be prosecuted? If so, was that offer made with the knowledge of the Attorney-General, the Solicitor-General or the Secretary of State for Defence?

The Attorney-General: I had no knowledge. It was not made with approval by me, by my hon. and learned Friend or by any officials. I do not know, I cannot know what the Secretary of State for Defence said.

Mr. Mark Fisher: Ask him.

Mr. Anthony Beaumont-Dark: Will my right hon. and learned Friend accept that his hon. Friends on this side of the House applaud the decision he took in the first place to prosecute Mr. Ponting and that we also warmly welcome the fact, which is as helpful to the Civil Service as to anyone else, that he will prosecute in cases where people betray their trust? Will he not agree that if the Ponting ideal of loyalty becomes the norm, it has more dangers for the Civil Service than it does even for the Government?

The Attorney-General: I think I have made my view clear that there is a real risk of a loss of confidence between Ministers and civil servants. That is a matter which no doubt will be much more fully aired in the debate on Monday.

Mr. David Winnick: Do we take it from the answers that have been given today by the Attorney-General that he does not accept what has basically been confirmed in the court's decision: that a civil servant's duty first and foremost is to Parliament and not to a Government bent on misleading the House? Does he not accept on reflection that his own reputation and integrity would have been much higher today if he had worked on the same principle as Mr. Ponting?

The Attorney-General: I have not, in fact, intended to take or even contemplated taking any documents out of my office and giving them to the press, to the hon. Gentleman or to anybody else.

Mr. Home Robertson: Or to Parliament.

Mr. Derek Spencer: Does not my right hon. and learned Friend agree that the formal admission made by counsel for the defence at the beginning of the trial, together with the summing up of the judge, show that there was a strong prima facie case that would have led even the right hon. and learned Member for Aberavon (Mr. Morris) to prosecute?

The Attorney-General: I hope that the sort of approach that I would expect him to take might well have led to that result.

Mr. Alex Carlile: The Attorney-General has told us that he was not aware of the offer made to Mr. Ponting that he would not be prosecuted if he resigned. Will the right hon. and learned Gentleman confirm that, if he had known of that offer, he would not have consented to the prosecution? Will he also tell the House on how many other occasions has an Attorney-General consented to the prosecution under the Official Secrets Act 1911 without reading the papers and after a brief account of the facts over the telephone?

The Attorney-General: The Secretary of State for Defence has been kind enough to tell me that he did not know either of any offer that might have been made. If such immunity was offered it would have been offered without my consent. Immunity can only be offered in cases of this sort with the consent of one of the Law Officers.

Mr. John Stokes: Is my right hon. and learned Friend aware that in spite of all the noise we have heard across the House today and in spite of all the excitement in the media, most ordinary people greatly applaud the decision he took? Although Mr. Ponting was acquitted by the jury, they are very distressed about the case and will welcome the debate on Monday on the General Belgrano.

The Attorney-General: I thank my hon. Friend for what he has said.

Mr. John Morris: On mature reflection, was there not an element of undue haste in the decision to prosecute in that information was drawn to the attention of the Director of Public Prosecutions on 13 August, including, as I understand it, the recommendation of the chief of the defence police, not to prosecute, and on 17 August, four


days later, the Attorney-General agreed to prosecute? As we understand it, he was on holiday and presumably, as the hon. and learned Member for Montgomery (Mr. Carlile) indicated, had no papers with him. Is that not unique? Does the Attorney-General agree that there is a need for a much more restrictive Act and, in particular, to balance the public interest according to his own words, which I commend to him:
But the public interest also requires that there is no misuse of secrecy to cover up errors or bungling or to avoid criticism." —[Official Report, 15 June 1978; Vol. 951, c. 1258.]
Those were the words of the Attorney-General himself in the House on 15 June 1978.

The Attorney-General: I do not think there was undue haste. It was a very lengthy telephone conversation—[Laughter]—

Mr. Speaker: Order. Mr. Attorney-General.

The Attorney-General: —on matters which were in a small compass, which were of no major difficulty and on which I already had the benefit of the very helpful and careful advice of my hon. and learned Friend the Solicitor-General and the very experienced views of the Director of Public Prosecutions. In those circumstances there was in my view no undue haste.
The fact that the decision was taken on holiday is not unique. I suspect there were many occasions on which the right hon. Member for Morley and Leeds, South (Mr. Rees), when he was Home Secretary, had to take decisions about warrants when he was out of the office. I am sure it must have happened in other cases.
The right hon. and learned Member for Aberavon (Mr. Morris), requesting a much more restrictive Act, quoted words of mine which I am not ashamed to agree with. That was tried in 1979 in a Bill in which the incoming Government reacted with great speed to the Franks report, very much unlike the complete lack of action by the Labour Government over the previous six years. That Bill did not meet with the approval of the other place. There was a great deal of criticism gummed together by Fleet street—[Horn. MEMBERS: "Oh."] I am not afraid to take on Fleet street. A lot of it was clearly inspired from Fleet street; there is no doubt about it. One had only to read the articles, press criticism and comment at the time. As a result of that the Bill was withdrawn. At least we tried. It is much more than that lot over there did. Since then, as the House knows, the Prime Minister has said that there is no intent to try to reform it again. That is the position as I know it today.

EUROPEAN COMMUNITY DOCUMENTS

Ordered,
That European Community Documents Nos. 9219/83 and 11039/84, draft Directive and amendment on air quality standards for nitrogen dioxide, and 11159/83, Communication from the Commission concerning environmental policy in the field of combatting air pollution be referred to a Standing Committee on European Community Documents. — [Mr. Biffen.]

References to Members

Mr. Ivor Stanbrook: On a point of order, Mr. Speaker. Is it not in accordance with the traditions of the House that we treat each other and speak of each other as hon. Members? When an hon. Member accuses another of dishonesty and the Member accused denies that accusation, and when that denial is supported and confirmed by another hon. Member who is in the best position to make a decision and to give us the truth, is it not right that the Member making that accusation should withdraw it totally at the time?

Mr. Speaker: Order. I have listened with great care to what was said this afternoon. It is right that we do not impute dishonour to each other, but what the right hon. Gentleman the Leader of the Opposition said was that he did not himself believe it. That is a different matter.

Mr. Neil Kinnock: Further to that point of order, Mr. Speaker. What I said, and Hansard will show it tomorrow, was that my words stand unless and until I receive an adequate explanation of the decision, in the circumstances, to prosecute Mr. Ponting when no breach of national security had taken place.

Solicitors (Independent Complaints Procedure)

Mr. Alfred Dubs: I beg to move,
That leave be given to bring in a Bill to reform the system of investigating complaints against solicitors by establishing a General Legal Council independent of the Law Society; and for connected purposes.
The purpose of the Bill is to establish a new procedure for investigating complaints against solicitors. We do not know how many such complaints there would be if the public had confidence in the present system. According to the National Association of Citizens Advice Bureaux, it has received about 10,000 queries a year relating to the quality of solicitors' work. In its annual report, the Law Society says that it received 9,000 inquiries and complaints, although 2,000 of these came from members of the profession.
The main thrust of my Bill concerns the existing functions of the Law Society and how to replace them by a different system. The Law Society has three functions. It looks after the interests of the profession, it administers the legal aid system and it investigates the complaints by members of the public against solicitors. I contend that what I am seeking to do could not be called something that is against lawyers or the Law Society. I maintain that the Law Society has a major conflict of interest in trying to look after the interests of the profession on the one hand and investigating complaints made against members of the profession on the other. This conflict of interest has been recognised as existing by other professions who arrange their affairs differently—for example, the medical and architectural professions.
The Law Society itself is aware of this conflict of interests. In 1984, its professional purposes committee wrote:
The Society is accused of putting the interests of the profession and of individual solicitors before the interests of the public when dealing with complaints. At worse the accusation is that the Society is 'whitewashing' members of the profession; at best there is unease on the part of the responsible critics that justice is not seen to be done because the Society is judge and jury in the profession's own cause.
In the previous year, 1983, there was a joint submission by the the Police Federation and the Law Society about the proposed police complaints and discipline system. This said:
The public does not believe that the present system is impartial. The public does not believe that complaints against the police are fairly investigated and adjudicated. The police investigate and then judge complaints against them within the police service.
It seems to me that what the Law Society has said about complaints against the police applies equally to complaints against solicitors. Furthermore, in the code of professional conduct produced by the Law Society, there is a paragraph that talks about the conflict of interest when a solicitor may represent more than one party. I should have thought that, by analogy, all these points reflect adversely upon the Law Society's conflict of interest. That is understood.
The public may lay several types of complaint against a solicitor. They may concern his conduct, his negligence or what the Administration of Justice Bill refers to as inadequate professional services. By their very nature, these are hard to define or classify. Individual complaints may go from one of these headings to another.
The present system for investigating complaints has at its core the Law Society. I have looked with some interest at the pamphlet produced by the Law Society entitled "Complaints About Solicitors". About half of the pamphlet says what the Law Society cannot do and talks about consulting another solicitor in such circumstances. However, there are a number of detailed questions that the individual should answer for himself before deciding whether there is a basis for an approach to the professional purposes committee of the Law Society. I should have thought that, for the average person in the street, this represents a formidable hurdle, and explains why many people are reluctant to take their complaints to the Law Society in this way.
There are other features of the present system, to which I shall refer only in passing because time does not permit a more detailed analysis. There is the solicitors disciplinary tribunal, to which the public can refer complaints if they are willing to pay costs, but to which, in the normal course of events, there are only references from the Law Society. There is a negligence panel run by the Law Society to help individual complainants find solicitors when they wish to pursue actions for negligence. There are the courts to which the individual has the right of recourse in the case of negligence, and there is the lay observer, whose responsiblity is to look into the way in which the Law Society is investigating complaints where there is dissatisfaction about how this is being done.
Apart from conflict of interest, there is much dissatisfaction with the way that the Law Society handles complaints. Since I became interested in this subject some time ago, and particularly over the past week or two, I have had virtually an avalanche of complaints about the way that the Law Society handles complaints. Letters and telephone calls keep coming to me, and not one has done anything other than support my stand.
There was the famous Glanville Davies case, and I do not want to say too much about that. However, the Ely report which looked into the matter on behalf of the Law Society said:
The whole episode is a disgrace to the Law Society. We can find few aspects of the complaints that were handled properly." 
There is concern that the Law Society will not look into complaints about its solicitors presented by a third party. There is concern about the large number of refusals to investigate other types of complaints by the Law Society. Many constituents and other people have come to me with complaints about fees in immigration cases and so on, and there has been either unhappiness at what the Law Society has done or an unwillingness even to contemplate going to the Law Society.
The purpose of my Bill is to establish a new body called the general legal council. This would consist of solicitors and representatives of consumer organisations such as the National Consumer Protection Council, the National Association of Citizens Advice Bureaux, the Consumers Association and the Legal Action Group. To allay the concern of the profession, the Bill will make provision for a bare majority of solicitors on the council. All the members of the body will not be appointed by the Lord Chancellor. They will have a qualified staff to help them.
The functions of the general legal council will be to have an independent method of investigating complaints against solicitors, to be the sole focus of complaints. That means that one would have only one place to go to for the


complaint to be dealt with, even if subsequently it were decided that the solicitors' complaints tribunal might be the appropriate body to deal with a case of misconduct.
Because of the complexity of complaints, the general legal council would have a responsibility to advise and help individual complaintants as to how to proceed further with their complaints. Taking a leaf out of the Administration of Justice Bill, which is going through the other place at the moment, I believe that it is right that the new body I propose should be able to remit part of or the whole of the fees that have been collected by a solcitor if that body feels that there is substance in the complaint.
The general legal council would be able to deal with matters of negligence. The council would have an arbitration panel which would seek to resolve questions of negligence within a £2,000 limit. If arbitration did not work, or if the sum of money was clearly larger than £2,000, there would still have to be recourse to the courts.
I submit that my proposals are popular among many people who feel that they are not getting justice when they complain about their solicitors. The Bill is popular because it is supported by a wide variety of bodies — for example, the National Consumer Protection Council and the Legal Action Group. I believe that it makes sense that the solicitors' profession, for which I have enormous respect, should handle its affairs differently so that the Law Society's responsibilities are distinct from complaints against solicitors. I commend the Bill to the House.

Question put and agreed to.

Bill ordered to be brought in by Mr. Alfred Dubs, Ms. Jo Richardson, Ms. Clare Short, Ms. Harriet Harman, Mr. Clive Soley, Mr. Austin Mitchell, Mr. Andrew F. Bennett, Mr. Chris Smith and Mr. Tony Blair.

SOLICITORS (INDEPENDENT COMPLAINTS PROCEDURE)

Mr. Alfred Dubs accordingly presented a Bill to reform the system of investigating complaints against solicitors by establishing a General Legal Council independent of the Law Society; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 19 April and to be printed. [Bill 81.]

Orders of the Day — Transport Bill

Order for Second Reading read.

Mr. Speaker: More than 34 right hon. and hon. Members have indicated their wish to take part in the debate. I propose to apply the 10-minute limit to speeches between 7 pm and 8.50 pm. I hope that those right hon. and hon. Members who speak before 7 pm, especially Privy Councillors, will bear in mind the limit that will be applied to Back Benchers.
I must tell the House that I have selected the motion in the name of the hon. Member for Wellingborough (Mr. Fry).

The Secretary of State for Transport (Mr. Nicholas Ridley): I beg to move, That the Bill be now read a Second time.
May I first say a word about the amendment in the names of some members of the Select Committee on Transport and others. I am sorry that Committee members were not able to publish their report before Second Reading today. I hope that they will be able to get the report out before the Committee stage. They have toiled long and hard. The Bill is a major part of the Government's legislative programme. It is also a large Bill. If we are to have sufficient debate in Committee on the Bill's many detailed provisions, we must set it on its course. I look forward to seeing the Committee's report, which no doubt will be of great assistance to hon. Members.
The purpose of the Bill is to halt the decline that has afflicted the bus industry for more than 20 years. Many have assumed — wrongly — that that decline was inevitable. It was not. One of the principal causes of the decline was the system of regulations and near-monopoly — the 50-year-old road service licensing rules which embodied an assumption that the best way to protect bus services was to restrict the numbers that could operate.
The Bill is about competition. We want to see operators free to provide the services that the customers want. We want to see competition providing an incentive to be efficient and to offer passengers a better quality of service. The customers may want greater efficiency, lower fares, smaller buses going into residential estates, greater comfort or a more polite and helpful driver. Competition is the key to these improvements. It is the key to increasing patronage.
The present bus regulations date from the 1930s, but the bus industry must learn to meet the challenge of the 1980s. That challenge comes from the private car. As more people enjoy the use of a car, so bus travel has declined, both relatively and absolutely. The industry's response has been to demand, and local authorities' response has been to grant, escalating levels of subsidy. Revenue support between 1972 and 1982 increased from £10 million to £520 million. Even this staggering increase has not halted the decline. It seems to be assumed that if only there was a little bit more subsidy everything would miraculously be all right. The industry was saying the same thing five or even 10 years ago. It got its way. Subsidy increased. But have services improved? Are the customers now satisfied?
By concentrating too narrowly on subsidy, the industry has neglected its market. Blanket subsidy will never solve the problems of the bus or any other industry. Industries have to adjust to their market, increase it if they can, and eventually live by it. In the short term, subsidies can help to ease the transition from a regulated to a competitive market. Subsidy is also crucially important in the provision of transport for people who do not have access to a car and who live in remote areas or need to travel at unpopular times of day or week. The Bill marks a change from subsidy to the industry —a subsidy that all too often has leaked into costs — to subsidy for those passengers who need it.
The Bill is not about reducing subsidy. It is about putting life back into the industry and making sure that the country gets the best value it can for the customer.

Mr. Stan Crowther: Bearing in mind what the right hon. Gentleman has said about the need to halt the decline, does he agree that, far from there being a decline in south Yorkshire, during the past 10 years there has been a constant expansion of the bus service with the benefit of subsidies? Does that not destroy the right hon. Gentleman's argument that subsidies do not prevent decline? In south Yorkshire those subsidies have prevented a decline. Would it not be better to extend the south Yorkshire system to the whole country?

Mr. Ridley: There has been a massive increase in the subsidy in south Yorkshire. Speaking from memory, the subsidy is about £60 million, 49 per cent. of which comes from taxpayers' funds. That is more than the nation can afford.
In looking only to subsidy—as the hon. Member for Rotherham (Mr. Crowther) and south Yorkshire have—as a solution, we have overlooked the depressing effects of 50 years of regulation on the efficiency and responsiveness of the industry. Whenever an industry is regulated, some of the freedom of the customer to buy what he wants is removed. One begins to discourage and turn away one's best customers. Passengers on profitable or potentially profitable routes pay higher fares than they ought. The industry becomes defensive. Old markets and old routes are protected at the cost of other passengers. There is plenty of life in the local bus market but it is being stifled by regulation.
Thirty-nine per cent. of households do not have the use of a car. In the 61 per cent. of households which have the use of a car, many members will seldom or never be able to use it. That is the bus's natural captive market—a substantial home base for any industry. The bus industry should be trying also to persuade people who have regular use of a car to take a bus—by providing a service which can be relied upon to turn up on time, and which takes them where they want to go at a price they are prepared to pay.
There is evidence of latent demand. We were told in 1980 that there was no demand for express services; indeed the hon. Member for Glasgow, Shettleston (Mr. Marshall) predicted in 1979 that, as a result of the Government's proposals for freeing express coach services,
In five years' time nothing will remain of the existing public transport system. There will be a substantial loss of jobs in the transport industry." — [Official Report,27 November 1979; Vol. 974, c. 1218.]
It is now five years on and competitive operators have proved him wrong. There has been a 40 per cent. increase

in patronage of express coaches. Fares have fallen sharply. The number of express services has increased. Quality has improved. We also have direct evidence that local bus markets do not have to decline. The National Bus Company's new high frequency minibus services in Exeter have brought an increase of 100 per cent. in patronage because they have provided what people want.

Mr. Robert N. Wareing: The right hon. Gentleman was talking about the use of cars. Is he aware that in parts of my constituency that are 10 miles away from the city centre, where 94 per cent. of young people are unemployed and 70 per cent. of people are receiving social security benefits, people are likely to be denied a bus service because it would not be profitable? Seventy-five per cent. of those people have no use of car whatever. Will he give an assurance that those people will be catered for under his Bill?

Mr. Ridley: It is because of areas like those to which the hon. Gentleman is referring that it is necessary to reform the bus industry so that the people can be transported to where they want to go at reasonable cost. That is the whole purpose of the Bill. I give the assurance which the hon. Gentleman requires that services will benefit, not suffer, from what we are proposing.
The potential for expansion exists in both urban and rural areas. In rural areas the growth of car ownership and the decline in bus transport have had a very damaging effect on mobility for those who have to rely on it. This Bill will improve the services in those areas in three ways.
First, the tendering system will enable much better value to be got for the money councils spend on rural services. Not only will operators be able to offer vehicles of a size suitable to the demand, but the effects of competition will reduce the costs of running uneconomic routes, making many more of them viable.
Secondly, there is to be a transitional grant—£20 million in the first year, reducing by even steps over four years—which will be paid direct to operators through the fuel duty rebate mechanism until the full benefits of competition have worked their way through.
Thirdly, there is to be a rural services grant, administered in England by the Development Commission and in Scotland and Wales by my right hon. Friends.

Mr. Edward Leigh: Would my right hon. Friend like to comment on the suggestion by some district and county authorities in rural areas that this Bill may be a threat to them because of the threat of phasing out the cross-subsidy from commercially viable routes?

Mr. Ridley: My hon. Friend could not have intervened at a better moment, because that is exactly what I want to do. I will give him some examples of what has happened in rural areas when a competitive element has been allowed in.
First we have the three trial areas. Before I comment on those I would like to remind the House of some of the predictions about them made by Opposition Members during the passage of the 1980 Transport Act.
We were told that if any authority was rash enough to take advantage of the trial area provisions
The result would be that bus operators would charge skyhigh fares on profitable routes and provide no services on other routes where there may be more need." — [Official Report, 27 November 1979; Vol. 974, c. 1215.]


That was the hon. Member for East Lothian (Mr. Home Robertson).
What has happened? In the Hereford and Worcester trial areas fares have fallen sharply on many routes, and the subsidy requirement has been dramatically reduced by 38 per cent. But, most important of all, the level of services provided has increased by 70 per cent. in Hereford town. It has also increased marginally in the rural areas, where services have been declining fast elsewhere. The passengers, as my hon. Friend the Under-Secretary of State can testify from personal experience, think they have never had it so good.
Through tendering for services, Norfolk county council obtained a reduction from £500,000 to £150,000 in the cost of subsidising an identical group of services, and Surrey council is about to save £200,000 through obtaining tenders for a group of services around Guildford. The House must assume that, if savings of that order are available in Herefordshire, Norfolk and Guildford, they are available elsewhere. With savings like this from greater efficiency local authorities can provide better rural services for the same money, or provide the same services for less money. This gives county councils an opportunity to improve rural services at less cost. That is the answer to my hon. Friend, and he will find that county councils have an opportunity both to provide more services and to save money.
There are lessons here, as well, for all areas of the country. The effect of competition will be to reduce costs dramatically. It will bring into profitability services which were previously considered unprofitable. Fares on main routes will be reduced. Operators will look for and exploit new markets and offer new products. All experience is that the person who benefits from competition is the customer. That is the truth that all the propagandists, all the lobbies fearful of having their monopolies threatened by competition, have tried to hide.
If the market is to develop we must remove the obstacles that confront the innovator. So clause 1 of the Bill sets out to reverse the decline of the bus industry by the abolition of road service licensing. If the Opposition parrot cries were true that the aim of this Bill was to achieve a free-for-all for cowboys creaming off the profits with clapped-out buses—a charge to which I note the private sector has taken great exception—there would be no more than clause 1. There are in fact 113 further clauses. These seek to achieve a flexible and competitively structured industry within a framework of stringent controls to ensure reliability and safety and of local authority powers to meet the needs of those not served by the market, and of elderly and disabled people.
The existing requirements for operator licensing will continue, and clauses 21 to 28 contain a number of new provisions to modify and tighten up those requirements. Let there be no doubt about the Government's commitment to maintain operator standards and to provide the means to take firm action against operators who abuse the freedom which this Bill gives.
The provisions are linked to the system of registration which is set down in clause 5. An operator wishing to run a local service must register the route, stopping places and other details with the traffic commissioner. He must give notice of his intention to start or discontinue a service, and he must run the service in accordance with the registration.
Under clause 23 an operator who runs unreliable services or does not register them may have his public service vehicle operator's licence restricted. That can also happen if he interferes with another operator or behaves dangerously or recklessly, or if his maintenance is inadequate.
Under clause 91 an operator stands to lose 20 per cent. of the fuel duty rebate due to him for all local services run by him during the previous three months if he fails to register or runs a registered service unreliably. These are serious sanctions. We are committed to making the registration system work to ensure reliability.
Clauses 6 to 8 give the traffic commissioner powers to impose traffic regulation conditions where there are problems of severe traffic congestion or danger to the public. These powers are new; they have never been suggested before. They can be used to stop operators using unsuitable streets, to limit the use of bus stops or to prevent congestion caused by bunching by allotting the use of stops at different times to different operators.
With the ending of road service licensing there is no longer a need for a body of three traffic commissioners. Instead, clause 3 provides for a single commissioner, the existing Chairman of Traffic Commissioners, to be the authority for operator licensing for both passenger and goods vehicle operators and the new registration authority. I think that the whole House would like to thank all those who have served as traffic commissioners for the excellent service that they have given over many years.
In London, for the time being, road service licensing will continue and part II of the Bill essentially re-enacts existing legislation. Clause 44 enables me to bring deregulation to London also. But first we must see through the major changes that were introduced in London less than a year ago. Indeed, London Regional Transport management has to tackle a legacy of appalling inefficiency.
We also want flexibility between different types of vehicle. Clauses 9 to 14 bring taxis and hire cars into the mainstream of public transport, and restrict a local authority's power to limit the issue of taxi licences as already happens in Scotland.

Mr. Colin Shepherd: I should be most grateful if my right hon. Friend could spare a second to cover a point that involves chapter 6 of the White Paper. In paragraph 6.5 there is talk of a gradual increase in the number of cabs. It states:
The Government will propose provisions to relax progressively the restrictions on the number of taxis which operate in some areas.
I have not been able to find the relevant provision in the Bill. Is it covered by clause 14?

Mr. Ridley: Clause 14(2) contains the relevant amending provision which produces the pressure slowly to reduce the restrictions on taxi licensing.

Sir John Page: Why does the Bill discriminate against 30,000 private hire car drivers in London, who are not allowed to take part in the sharing scheme despite the fact that there is probably the greatest demand for it in London?

Mr. Ridley: My hon. Friend has discussed that matter with me. I think that the Committee will want to debate that point. It is a question of whether we should have supervision and licensing of hire cars, with all the


bureaucracy and expense that goes with that, or whether the present arrangements, which most people find satisfactory, should continue. However, I am happy for the Committee to consider that issue to see where the balance of advantage lies.
There are three ways in which taxis can operate in future. First, passengers may still hire a taxi for their own exclusive use. Secondly, clauses 9 and 10 make it possible for people who wish to share a taxi or hire car to pay separate fares. Thirdly, clause 11 allows licensed taxis to be used to provide regular local services.
In order to be sure that competition is fair, the Bill contains proposals for the restructuring of the bus industry. To abolish road service licensing without tackling the issue of competition on fair terms would be reckless. Freed from the constraints which road licensing imposes, companies could use their market strength, bolstered by public subsidy, to stifle their competitors. That is, indeed, what they are trying to do in Hereford.
I turn first to the National Bus Company. It is required to submit to me plans for the disposal of its operations to the private sector and to implement those agreed plans within three years. The main objective of the company will be to promote sustained and fair competition not only at the disposal stage but also in the behaviour of local subsidiaries competing in the deregulated market.
We want local managers of the National Bus Company and their employees to own as much and as many of these companies as possible and the Bill makes special provision for that.
Secondly, the passenger transport executives and some 50 district and regional councils at present have their own bus undertakings. By the time deregulation takes place they will he required to form Companies Act companies to which they will transfer the bus undertakings. These new companies will be at arm's length from local authorities, and will have to compete on fair terms with other operators. After deregulation it will not be possible to subsidise the companies directly except with my consent. The separation of the bus undertakings from the PTEs is the first step in reorganising the metropolitan bus undertakings into several separate competing companies. Clause 58 provides the necessary powers to require breakup after the transitional period.
I should like at this point to refer to a provision which is not in the Bill, but which is an integral part of our policy for competition. I refer to the removal of the present exemption of bus service operators from the provisions of the Restrictive Trade Practices Act. To continue that exemption would be incompatible with competition. It can be removed by an order made under the Restrictive Trade Practices Act.
One matter of concern during the consultation has been the role of local authorities. In a free competitive market it no longer makes sense for local authorities to have a duty to co-ordinate public transport. Instead clause 55 places a duty on them to secure powers to subsidise passenger services which are not provided by the market. These are powers to promote the use of transport services generally, provided that they do not inhibit competition. Local authorities will be able to discuss the transport needs of their areas with the operators, to provide timetables and to advise the traffic commissioners about traffic problems. Their role is if anything increased.
Local authorities are required to seek competitive tenders for subsidised services under clauses 80 to 84.
Open tendering will ensure that all bus operators will have equal access to subsidy; that local ratepayers know what bus services are being bought at what cost to them; and that local authorities will be able to get the best value for money in their use of subsidy.
Clause 80 places a duty on local authorities to consider their expenditure on public and school transport services as a whole in order to get best value for money. These functions must not go on in isolation from each other. This is an important way to get more effective use of public money.

Mr. Christopher Hawkins: Is my right hon. Friend aware of the widespread concern that has been generated by the campaigns run by Opposition parties in my constituency and many other constituencies to frighten old and disabled people into believing that the Bill will abolish bus passes? Will he condemn such scaremongering, and take this opportunity to reaffirm that under the Bill bus passes can continue? Will he give us any details of how they will operate under the new system?

Mr. Ridley: I am grateful to my hon. Friend for that intervention. The Bill gives the lie to the scare stories that my hon. Friend has heard to the effect that the powers of local authorities to provide concessionary fare schemes for elderly, blind and disabled people will go. That is simply not true. But we seek to make them more widely available and to allow any operator who wishes to do so to participate. That represents an extension. Nor does the Bill force local authorities to use tokens rather than bus passes. Some local authorities already operate bus pass schemes with a number of operators. Therefore, I am sure that my hon. Friend will tell those who have been spreading scare stories—and some local authorities have spent a lot of ratepayers' money on propagating scare stories—that they have been wasting the ratpayers' money in throwing it around on something that is not true.
The Bill also clarifies local authorities' powers to provide concessionary fares—

Mr. Gordon A. T. Bagier: The right hon. Gentleman has been paying a lot of lip service to the experiment in Herefordshire, but is he aware that Hereford council has stated categorically that the experiment has led to
reduced benefit to recipients of Concessionary Travel Schemes as a result of the unstable fares and the necessary adoption of a token system".
Does that not give the lie to the right hon. Gentleman's statement?

Mr. Ridley: The hon. Gentleman has kindly given me another point. The cheaper the fares are, the less concessionary fare passes will cost. If, as in Hereford, there are free buses running, concessionary fares will cost nothing. Through competition, the Bill's provisions will lead to a reduction in fares on many routes, and the local authorities will be able to make savings by not having to pay so much for concessionary fare passes.
The transitional provisions in schedule 5 are important. They are a result of the consultation exercise. Our aim is to achieve as smooth a transition as possible allowing competition to emerge gradually without giving an unfair competitive advantage to any one class of operator and without disrupting services on which passengers rely. Road service licensing is to be replaced by the registration system on 1 October 1986. By then local authorities will


be required to have completed the move from network to tendered subsidy and to have transferred their bus undertakings to companies, and the National Bus Company to have reorganised its operations to ensure fair competition.
Road service licensing criteria will be modified in this period to allow greater competition. The traffic commissioners will be required to accept an application unless the new service would disrupt arrangements being made by local authorities to effect a smooth transition, unless the applicant would be able to compete unfairly because he was still receiving blanket subsidies or unless the new service would create severe traffic problems.

Mr. Gordon Oakes: On the question of transition, will the Secretary of State look at his diary? Does he realise that 1 October 1986 is mid-week? In fact, it falls on a Wednesday so that one system will be in operation on a Tuesday and a different one on the next day. Contracts must be drawn up with operators, often on a weekly basis. Did he consider that when he chose 1 October?

Mr. Ridley: I shall look at my diary if the right hon. Gentleman will read the Bill. He will observe that there is clearly set out in the Bill a transitional period in which all these things will happen so that they are complete by 1 October. The situation will not change dramatically overnight because everything will have been put into place.
The Bill also contains the provisions on bus substitution services that the Select Committee suggested in 1983. The railways board may put forward proposals for bus substitution in situations where existing rail services are making significant operating losses and where buses can provide travellers with a reasonable alternative service at substantially lower cost of operation.
It will be for the railways board to put forward proposals for bus substitution in particular places, and I would take account of those bus substitution proposals in deciding whether to give my consent to any proposal from the board to withdraw rail passenger services from a particular line. This is an area where the Select Committee can see its work reflected in our proposals.
My proposals for the bus industry have been called radical. They are; nothing less would do. It is strange that these days the word radical frightens the Opposition parties to death. The Labour party's radicalism is to throw more public money at any problem that it observes. Liberal radicalism has become agreement with everyone who has a complaint in the hope of picking up the odd vote. But bus services are too important to too many people. We cannot shirk reform. We cannot sit idly by and watch the bus industry sink further into decline, leaving more people isolated. There is far more to this Bill than deregulation, far more than privatisation. It is a full-scale rescue plan for the bus industry. It sets local authorities free to concentrate on help for people who need it. It sets operators free to compete and find markets in order better to serve their customers. In short, the Bill puts the passengers first. I commend it to the House.

Mrs. Gwyneth Dunwoody: It is important to establish what the Bill is and what it is not.
First, it is not a Bill about improving public transport. The one thing that is absolutely certain is that the Secretary of State has pushed ahead with the legislation irrespective of the fact that he has no proper evidence to prove that it is necessary, that a Select Committee of the House has been taking detailed evidence which would have enabled him to come to some sensible conclusions and that, even after the rapid run round the country which passed for consultation on the part of his hon. Friend the Under-Secretary, there is still nobody of any status or with any real knowledge of the transport industry who imagines that the legislation will improve the bus services.
The Bill is about the two pet obsessions of the Secretary of State. One is privatisation and the other is deregulation. It is therefore important that we should examine closely what is being introduced to the House in such a hurried and incompetent manner.
The Bill will not provide a better service for children on their way to school. It will not improve facilities for old-age pensioners who need concessionary fares. It will not provide a more efficient service for women who rely on public transport to do their shopping and to get to the doctor and to other essential services.
The Bill is about the Secretary of State's wish to save money on subsidies. He has made that plain from the beginning of the debate. His attitude towards public service is that it should be provided free of charge preferably and with no protection for the people working in the industry or for those who wish to benefit from the services. He made that clear in the explanatory statement. He says that of course 50,000 jobs will have to go, but that other jobs will be provided in the public service.
The change that the Secretary of State is proposing will lead to total anarchy. No such measure is applied anywhere in the world except in Kenya, which has now decided that it needs a form of regulation, and in Hong Kong, which has one or two minor differences from the United Kingdom of Britain and Northern Ireland. Such a measure when applied in other places has been found over a period to lead to total anarchy and chaos.
The attitude of the Secretary of State is that people should be prepared to go and buy cars and, if they cannot do that, they must travel by taxi. That argument has threaded through consideration of the Bill.
The National Federation of Women's Institutes, an organisation not normally connected with revolutionary ideas, was so worried by the implications of the Bill that it carried out a survey of 4,000 members. It found that 50 per cent. of women in the Oxford group had no day-time car, 40 per cent. of women in the area had no car licence, 30 per cent. needed the bus once a week or more and, of 237 towns and villages covered in the survey, only 33 had an evening service. Therefore, the majority of women, for shopping and medical attention, needed the advantages of a bus. The NFWI said that the effect of the legislation would be for women in rural areas to be left totally isolated, and that its anxiety had turned to despair. It said that only those with two cars per family in the country would be able to have decent lives.
The effect of the legislation will be that not only those who live in villages will suffer. Those who live in large cities where shopping centres and hospitals are concentrated on the periphery will also suffer.

Mr. Colin Shepherd: rose—

Mrs. Dunwoody: I will give way to any female member of the Government. [HON. MEMBERS: "Sexism."]

Mr. Deputy Speaker (Mr. Harold Walker): It is clear that the hon. Lady is not giving way.

Mr. Colin Shepherd: I am most grateful to the hon. Lady for giving way. This is an important matter to the women of the country. When the hon. Lady wrote to the National Federation of Women's Institutes, did it tell her that the Herefordshire federation did not share the view of the national federation? It is the north Herefordshire women who have been living and working in the trial area during the past three years.

Mrs. Dunwoody: I shall come to the Hereford experiment later and go into it in very great detail. I shall then comment on the hon. Gentleman's point.
The reality is that nationally 30 per cent. of women have car licences, compared with 68 per cent. of men. In the west Midlands, women account for 60 per cent. of the passengers of the bus companies. Among old-age pensioners, 14 women use buses for every six men. It is important, therefore, that we are aware who will be especially concerned with and damaged by the proposals.

Mr. Anthony Steen: The House would find it tremendously helpful if the hon. Lady could explain why the Bill, which is removing regulations that are controlling the system and not allowing it to liberate, will discriminate against women. In fact, it will help women by providing many more services, especially in rural areas where it will bring women into the towns. That is a good thing, not a bad thing.

Mrs. Dunwoody: rose—

Mr. Deputy Speaker: Order. As a large number of hon. Members on both sides of the House will seek to catch my eye during the debate, I must tell the House that in deciding whom to call, I shall take into account the interventions made and the extent to which they have preempted other hon. Members.

Mrs. Dunwoody: It is very important to understand that the hon. Member for South Hams (Mr. Steen) comes from an area with large spreads of villages and very few buses. He will soon find that in the South Hams area those who need buses will have their interests badly damaged by the Bill. The reason lies precisely in the effect of deregulation, which we have just been told is the most important aspect of the Bill.
The reality is that the entire legislation has been brought forward on the basis of what we were told were a number of experiments. The Hereford experiment has been mentioned time and again. We were told that deregulation and the conversion of municipal and NBC operations into private companies would wholly transform any provision and that in identifying unprofitable routes and the tendering for private contracts, the bus industry would be liberated and better services would be provided for everyone.
The reality in Hertfordshire, and especially in Herefordshire, was the opposite. In Hereford, the rural areas were, without exception, worse off at the end of the experiment than at the beginning. It is true that in the centre of the town there were initially a number of additional buses. However, they did not come in a

properly timetabled manner nor in a way that provided better facilities. Some of the fares went down initially, with some operators actually running free services.
One does not need to be too brilliant an economist to work out that no company can continue to run free services for any length of time if it is, first, to replace its existing stock and, secondly, to provide decent conditions for those who work for it. Yet we are told by the Secretary of State that that is not a problem because in future those who want to run buses will have total freedom to do so. The right hon. Gentleman has actually suggested that those who are out of work can rush out and buy a bus and operate it in the areas where they are unemployed. Far from creating new jobs, this legislation will do one simple thing—it will make it extremely difficult to maintain any safety standards for the passengers. I would have thought that even Conservative Members would be concerned about that.

Mr. Roger King: Tell us about London Transport.

Mrs. Dunwoody: I shall be happy to discuss London Transport in a minute. If the Secretary of State really believed that the Bill was the answer to providing a new transport system, surely he would have been before the House today saying that it should be brought in for London as soon as possible. The actual contradiction to his present argument lies in the fact that he has an opportunity to introduce the scheme in London, but he has no intention of doing so.
Any public industry must have a safety responsibility to its passengers. In Hereford, some of the private operators were found to have many dangerous faults in their buses-47 in one instance, and the operator lost his licence. One man was maintaining his buses in a layby—which is the ideal way to ensure a high standard of public service vehicles. Other operators were found to have a number of major faults in their buses. But we are told by the Secretary of State that we do not have to bother with all that, because he will monitor the effects carefully to ensure that all public service vehicles maintain a very high standard of safety.
All sides agree that, at least initially, we may have a larger number of smaller bus operators providing services— even if those services, almost inevitably, cover a smaller number of routes. There is no doubt that one effect of much smaller bus companies will be additional problems in maintaining the standard of the vehicles. Even if we ignore the business methods of the sort of people who will try to cream off any profitable routes, and look at everybody across the board, additional problems will be created simply because of the size and viability of the companies.
The Leeds institute for transport studies, in the most thorough survey of deregulation to date, quotes a survey of 478 bus operators in Yorkshire. It found that small companies with one or two buses were eight times more likely to have defects than the major companies with 50 or more buses. That also applied to the number of defect notices per million vehicle kilometres—the figure was absolutely minimal at the top end of the scale compared with operators with one or two vehicles. One reason is that a small company cannot afford its own maintenance yards and equipment. No matter how honest the new operators, safety standards inevitably decline.
The evidence from the Government's trial areas is very instructive. Four new operators emerged in the Hereford trial area. The Devon and Norfolk areas were not considered to have shown the effects of deregulation. Of the four in Hereford, one company had its licence reduced and was then banned in February 1983. The operator had broken 47 safety codes, 27 of them immediate —meaning that they needed immediate attention. The traffic commissioner, in banning the operator, said:
to allow you to continue to hold a PSV operator's licence for any longer than is absolutely necessary could result in death or injury to the public.
In March 1984, another operator had his licence reduced following more complaints.
From the evidence that exists, it is clear that more companies with more safety problems and more operators with even less interest in safety will enormously increase the strain on the traffic commissioners. Without additional resources — and although the Secretary of State has spoken about the need to maintain a proper service, he has given no sign that he will provide the proper resources—the traffic commissioners will inevitably have to shift from preventing the operation of unsuitable companies to picking up the pieces and banning the companies after they have proven to be inadequate for the task in hand.
The work of the traffic commissioners for road haulage and passenger vehicles will be merged under one person. An assurance is needed that the work per employee will not be increased. There are signs that the merger may lead to overall reductions in staff available and consequently to even less monitoring of the safety provisions.
The White Paper promised new safeguards to ensure that safety standards were maintained. The control, to which the Secretary of State referred this afternoon with great approval, means that the traffic commissioner is able to prevent dangerous traffic conditions or severe traffic congestion. Those are the circumstances in which he can operate.
However, clause 7 says that an operator cannot be assumed to operate the proper service
solely by reason of his complying with any traffic regulation conditions.
It is clear that part-time drivers working on the buses as a second job could become the norm. Otherwise, why is it so essential we should introduce those changes? All the threats to safety that that implies have been glossed over both this afternoon and in the talks that the Secretary of State and the Under-Secretary of State have had with all the people concerned.
Clause 81 says that tenders
may not include conditions with respect to the terms of employment".
In other words, we shall have no way of knowing what hours the people operating the buses will be working and how tired they will be. After 50 years of proper controls, the chance of bad crashes caused by over-tired drivers will be introduced as a law.
Inevitably, the Bill will affect those that we are told will be protected. The Secretary of State says that in future local authorities can, if they wish, hand out bus passes. Let us consider the whole business of concessionary fares. The Government say that they have not been banned, but they never refer to the fact that many authorities will not only be rate-capped but will be constantly told that they are in danger of going into penalty. The spread of operators alone

will make travel cards, which are a great asset to many old age pensioners, extremely difficult to use. [HON. MEMBERS: "Why?"]
Hon. Members do not seem to understand that, if there are many different operators on the same routes, there will, almost inevitably, be constant arguments over who is eligible to use travel cards. Inevitably, local authorities will move towards a system of tokens. One effect of that, which nobody ever wants to discuss, is that free travel comes to an end when all the tokens have been used up. At the moment, many elderly passengers go backwards and forwards using travel cards to do their shopping, to go out for entertainment, to receive medical attention and to go away at the weekends. That will not be possible under a system of tokens, which will be a much lower standard of provision. The scheme is completely indiscriminate since every operator must be given access to it. The only control that the authorities will have is if the charges are unusually high. A difficult service or an unhelpful company cannot be banned under the existing legislation.
The Government will claim that they have extended the scheme to children, but it emerges from schedule 7 that, although they have maintained the Scottish right to aid the mentally handicapped, there is no similar provision for those elsewhere in the United Kingdom.
The Government have already decided that next year they will cut concessionary fare grants by £48 million—more than 20 per cent. With the rate capping of the metropolitan county PTAs, the concessions will be of astonishingly little use.
It is not only the elderly and those in receipt of concessionary fares who will suffer. Those who live in the country will be particularly affected. Services will be disrupted. The National Bus Company is the main service in the counties and the cross-subsidy is worth at least £122 million. The institute of transport studies in Leeds estimates that it could be as high as £305 million. That will be lost because the Secretary of State has made it clear that he does not believe in cross-subsidy. He does not accept the fact that the only way that many bus companies make their operation viable is to cross-subsidise between peak hours and busy routes and difficult hours and rural routes or non-viable routes in the suburbs. That is such a basic way of balancing the bus books that I should have thought even the Secretary of State would have been careful before he wiped that out.

Mr. Ridley: The hon. Lady should be a little careful, because cross-subsidy involves much higher fares on the prosperous routes than are necessary even to break even. The Bishop of Durham has already said that it is immoral to make a profit on a bus route, so to cross-subsidise on a bus route must be super-immoral.

Mrs. Dunwoody: If people living in country villages have a choice between a higher fare and no bus, they will be perfectly clear in their own minds which they prefer.
Let us be quite plain what we are talking about. The Secretary of State tells us not to worry about the transitional period, because he is aware of the difficulties and will provide £20 million. Of course, he will reduce that by million over four years until it disappears, but he says that that is nevertheless bound to be enough to deal with all the difficulties. He also says that perhaps we should have £1 million for experiments with minibuses because they may be the answer. In Cheshire, the authority


bought a minibus and handed it over to Crosville. Less than 11 months later, that vehicle is clapped out, needs replacing and is unable to perform the function required of it.

Mr. Terence Higgins: I am rather worried if my right hon. Friend the Secretary of State is more extreme than the Bishop of Durham, but let me leave that on one side. The hon. Lady is looking all the time at the cross-subsidy from the point of view of a person receiving it, not at the £140 million which others are paying for that subsidy. Why should people in towns pay that subsidy, which is in effect a tax, to help those in rural areas?

Mrs. Dunwoody: Unfortunately, people in towns will not escape the effect of the Bill. We have heard a great deal about the services in Exeter. No one has said that the little minibus there is only running up and down an exeedingly limited central part of the city. Those who are paying the taxes that we are talking about, whether by rates or taxes, in the outer suburbs of Exeter are not benefiting from that tiny minibus and are not likely to do so. The hon. Gentleman must be clear that those people who live outside one or two clearly demarcated busy routes in the centre of cities will be in the same situation as those in the rural areas.
No one will cross-subsidise a bus going to a hospital outside the urban area. No one will cross-subsidise a school bus that is going across country from one comprehensive school to another. No one will cross-subsidise buses during difficult hours or on difficult, unused or half-used services. To think that those who live in towns will automatically be provided with better services is not to understand the implications. Almost inevitably, services will disappear. Then and only then shall we see the extent of the need for cross-subsidisation in order to provide a public service—because that is what the bus services are.
When we talk about the effects of the Bill in rural areas, we should be aware that the shire counties alone will have to find an extra £102 million in subsidies just to maintain services on the NBC routes. With a cut of £250 million—30 per cent—planned in April in transport subsidies, there is no way in which the shire counties can maintain those subsidies.
In Hereford — despite what we were told about Hereford town—no operator was willing to take on one of the 53 routes without a subsidy. We are told, however, "It is unfortunate if people cannot get buses. They can always get taxis." The Department is adopting a Marie Antoinette attitude—if people cannot have buses, let them take taxis.
It is, of course, more expensive to travel by taxi. Taxis cost on average 95p a mile, compared with 16.5p a mile on buses. About 75 per cent. of the population will not take cabs. The city controller's office in Indianapolis studied the various systems, and when told that it was the intention of Britain's Secretary of State to change the entire taxi service, commented:
England had the best taxi service in the free world by industry standards. Why is it that Government always wants to fix something that isn't broken?

Mr. Robert B. Jones: While the hon. Lady is talking of the United States, may I ask her to consider what is happening in Phoenix, Arizona, where taxis are operating as subcontractors for the weekend bus

service, at which time there are between 300 and 400 passengers, compared with 40,000 passengers a day during the week? That shows that, when there are fewer passengers, it is appropriate to have a taxi service. Is she aware that in that case taxi fares are almost identical to bus fares?

Mrs. Dunwoody: Removing the regulations applying to taxis will be no gift to taxi operators, many of whom will find themselves being undercut by others coming in. The system of licensing which they have enjoyed will be wiped out. The hon. Member for Hertfordshire, West (Mr. Jones) will discover that those in the taxi business regard this as an ill-conceived and unimaginative piece of legislation.
The second and next important leg of the right hon. Gentleman's case is the whole question of the privatisation of the National Bus Company. We are told that the right hon. Gentleman is not interested in having viable companies but wants them broken down into smaller units, although today he did not specify the size of company that he would regard as viable.
Grieveson Grant and Company, the stockbrokers, said that, if the whole of the NBC was sold as a unit, it would be worth between £150 million and £200 million. That estimate explains why the Bill is being rushed through. The Secretary of State is rushing to help the Chancellor of the Exchequer; if the Government cannot find sufficient state assets to sell off, the Secretary of State believes that the National Bus Company can be sold to help the Chancellor do something to improve the economic situation.
The Monopolies and Mergers Commission stated that the present structure of the NBC was beneficial to efficiency. The attitude of the Secretary of State is muddled. On the one hand he has evidence to prove that the unit as a whole is worth a great deal of money. On the other, he tells the operators, "I want it broken down into smaller pieces." He will, in the process, fall heavily between two stools. He will provide units that are too big for local operators to buy and run, but too small to interest the institutional investors.
All this destruction is being carried out in the name of promoting better public transport. It is worth noting that, since the National Bus Company was formed, nearly all the private companies, particularly the holding companies, have pulled out and have put their money into different types of operation.
The effect on the staff of the NBC will be disastrous, especially as most cost advantages will come from reduced wages being paid to them. The NBC has made it plain that its pension plans for staff will not be protected by the Bill and that the 1982 Act will not help the 15,000 pensioners involved.
Why are the Government so determined to push this legislation through in this way? Do they genuinely believe that by opening the gates to competition they will produce a new era of better bus transport services? [HON. MEMBERS: "Yes."] In reality, nothing of the kind will happen.
The Government feel that they need not indulge in consultation to discover what is really important for the public. They do not believe in constructing legislation based on research and investigative work done by those with knowledge of the bus industry. For this Government, it is sufficient to move fast towards certain shibboleths that


are important to the Secretary of State. One is to remove from the public sector any service that is providing a level of care if that service has any reliance on subsidy. It does not even matter if it is impossible for other sectors to replace the existing system.
It does not matter to them if many rural areas suffer and if people in towns who wish to use buses at off-peak times find it impossible to do so. It does not matter to the Government if what the right hon. Gentleman is doing will wipe out 50 years of road safety, of better services generally and of good facilities for those most in need. It does not matter to them if concessionary fares for the old and benefits for the young are wiped out.
It is important for the House to understand that the Secretary of State is concerned only that we should, by some means, hand the system over initially to small companies which want to cream off profits from any little areas of state assets that can be made available. The cost of this Secretary of State is high, but it is high mostly to those who cannot hit back, those who cannot protect themselves. I hope that, for that and many other reasons, the House will refuse—in the interests of those who are of most concern to us all—to give the Bill a Second Reading.

Mr. Peter Fry: I beg to move, to leave out from "That" to the end of the Question and to add instead thereof:
this House declines to give a Second Reading to the Transport Bill until it has had the opportunity of studying the imminent report of the Transport Committee on what is the most fundamental upheaval in the bus industry for over 50 years.
The amendment stands in my name and in the names of most members of the Select Committee on Transport.
I begin with what I regard as a House of Commons point. Last year the Select Committee decided to conduct an inquiry into the financing of the public transport services. In the autumn it decided to extend that study to take account of the bus White Paper. We discovered, however, in view of the amount of evidence that was put before us, that we could not report before Christmas. On the other hand, the Government, having produced their White Paper, also produced a mass of consultation documents and gave no deadline for this Second Reading debate. The chairman of the Select Committee wrote to the Secretary of State saying:
The Committee has accordingly agreed that I should write to you to request a delay in the introduction of that legislation until our report is published.
On 10 December last the Secretary of State replied:
I fear I could not undertake to do that—nonetheless, a Bill of this importance will undoubtedly be very thoroughly considered by Parliament through all its stages.
One would imagine from the wording of that letter that the Government were proceeding with speed to produce a Bill immediately following the Christmas recess. Indeed, that was the advice that some of us were given, yet not until today do we find the Bill before us on Second Reading.
The majority of members of the Select Committee feel that the evidence given to us was of such a nature that the rest of the House — certainly the members of any Standing Committee that might be set up to consider this major revolution—should have the advantage of that evidence and, preferably, of any report that is made.
We were aware of widespread concern on a variety of points among all sections of the community and across the political spectrum. I tell my right hon. Friend the Secretary of State, and my hon. Friends, that so far most of those concerns have not been resolved by the publication of the Bill. I believe that the work of the Select Committee is important. We have laboured hard and long to produce the report. We have taken evidence, and visited Hereford and Worcester. The taking of evidence has now ended and the report will shortly be produced.
I do not claim that the report will be enough. I do not claim that it will be either for or against the Bill. It will, however, show the House and the country how much feeling there is on the issue and how necessary it is to proceed with caution rather than rush madly ahead and accept the first set of proposals put forward.
In addition to my amendment, I should like to mention early-day motion 358 which calls for consignment of the Bill to a Special Standing Committee, again because those who will deal with the Bill should be entitled to take evidence from anybody whom they think would be able to help them, and, at least, to study the evidence that we have gathered. That is the very least that the House should allow. If we do not allow members of the Standing Committee to take advantage of all the work that their colleagues have done, the whole future of the Select Committees and the relationship between them and the House will be brought into question.
There are occasions when party politics are put on one side and we try to produce useful ideas that have a broad measure of agreement. That has been one of the bonuses of the Select Committee system. If Committees were always strictly partisan, their reports would be greatly devalued. I pay tribute to the Labour members of the Select Committee who bravely joined us in producing a unanimous report on the London area even though some people might have thought that they had gone too far in our direction.
The amendment is not supported only by those who put their names to it. It is also supported by no fewer than 11 national organisations. They are the Association of District Councils, the Association of Transport Co-ordinating Officers, the Bus and Coach Council, the Chartered Institute of Transport, Friends of the Earth, the National Association of Local Councils, the Ramblers Association, the Royal Town Planning Institute, Rural Voice, and Transport 2000, all operating under the aegis of Women in the Community — the National Federation of Women's Institutes. The organisation wrote to me as follows:
We cannot anticipate what the Select Committee will say, but we feel that it is constitutionally inappropriate for the House of Commons to consider legislation in advance of receiving the report of its Select Committee".
Although not opposed to the Bill in principle, the Association of County Councils also has strong misgivings and would like to see the Bill sent to a Special Standing Committee.
The list is impressive. It cuts right across the political as well as the transport spectrum. What is at issue is the right of the House to information. It would be a mistake for the report and the evidence that the Select Committee has heard to be produced after Second Reading —let alone after Committee stage.
Many of my hon. Friends are completely bemused by the Bill. They receive conflicting reports from local


councils, bus operators and voluntary organisations such as the NFWI. The Secretary of State and the Parliamentary Under-Secretary ply them with tea and sympathy in an attempt to encourage them to support the Bill. In my view, the House should have an opportunity to make up its mind about this fundamental change on the evidence, when it is published. That is the core of my plea. The House must decide whether to use our Select Committees or ignore them. Do we regard them as peripheral centres of activity to which we consign awkward hon. Members in order to keep them out of the Chamber, taking little notice of what they have to say? [Interruption.] Yes, some of us emerge every so often. Alternatively, do we accept that the Committees represent a serious attempt to enable a group of hon. Members gradually to gain a level of expertise on a subject that others would find it difficult to attain, to question Ministers and civil servants from a state of knowledge, and once again to begin to assert the influence of the House upon the Executive, no matter what colour it may be? No instance since the Select Committees were set up has brought the issue before the House as sharply as this.
My right hon. Friends the Secretary of State and the Leader of the House can ignore the protests that I am making. There is no doubt that the Government, with their huge majority, could roll the matter over. However, in the long run such action will not be good for the Government or the House of Commons, and I doubt whether it will help the cause of parliamentary democracy in this country.
Of course Ministers want to push through their legislation — that is what we expect of them — but sometimes Governments display a tinge of arrogance. I am sure that my right hon. Friend does not wish to give the House an impression of arrogance. It is because I am sure that he does not wish to give that impression that I urge him to accept my amendment.

Mr. Ted Leadbitter: Do I understand that the Secretary of State ignores the work of the Select Committee — as a senior member of another Select Committee I regard that as a serious matter in itself —even though he has been before the Committee for a substantial time?

Mr. Fry: It is true that my right hon. Friend appeared before the Select Committee, and we had a long and interesting session. He did not ignore the work of the Committee. The Committee made him very much aware of the work that it had done.
I should like to make it clear that I favour increased competition in bus services, that I believe that subsidies to passenger transport executives should be reduced and that I favour the privatisation of the National Bus Company. In regard to the latter, I must declare an interest, although my interest in bus matters goes back many years to when I was chairman of the Conservative bus policy committee and took part, with my right hon. Friend the Secretary of State for Social Services, in producing our policy document "The Right Track" before the 1979 general election.
It would be wrong if no Conservative Member expressed some anxieties about the Bill. I should like first to deal with some of the wrong impressions that have been spread abroad. The first is that, because the Transport Act 1980, which liberalised coaching, has been successful, the same must automatically apply to the stage carriage bus

industry. With coaches, the competition was not between two types of road operators but between two modes—road and rail. Moreover, as with deregulation in other respects, such as aviation in the United States, the result is more services on some routes and the disappearance of services on others. The Transport and Road Research Laboratory study has come up with some rather interesting figures. With all the extra coaches, there are only 43 more services as a result of the 1980 Act. That might surprise some hon. Members. Taking a service away to put it on another route is all very well, provided that a service remains in spite of the redirection. If a coach is taken off a route, there might be a stage carriage bus service serving the same route, but take off the stage carriage bus service and the people of the area are probably left with no public transport.
The second wrong impression is that innovation is virtually impossible under the present legislative set-up. Less than 0·5 per cent. of applications for licences have been refused recently. Even the example of Exeter, which has been given today, has taken place under existing law and without any competition. Competition could well undermine the success of that experiment.
A third false impression is that there has somehow miraculously been an increase in the number of passengers, enabling more services to be supplied and fares to be reduced. Revenue can be got only when demand exists. If there is not much demand, it is difficult to extend services as the Bill intends. Indeed, the evidence shows that the extra revenue comes not from existing passengers who make extra journeys. That is the evidence of the Association of County Councils.
A fourth misconception is that there will inevitably be massive economies. Existing economies are within a regulated system and at current fares. There is no guarantee that, in an unregulated system with cut price fares and without cross-subsidy, the same savings will necessarily accrue. The fifth fallacy is that the traffic commissioners are the ideal people to deal with problems that arise. I have been to Hereford and Worcester and seen some of the dangers of competition there and I am far from convinced that the traffic commissioners are the ideal people to do that job. My right hon. Friend the Secretary of State said today that the Bill would stop bunching, but how can we control six operators who arrive within one minute of each other at the same bus stop without taking control of the timetable? If we take control of the timetable we are not deregulating but altering the method of regulation. I ask my right hon. Friend to take that on board.
The idea that competition will always be the best thing is not borne out by current circumstances in Hereford, where the National Bus Company, by competition, is destroying the competition of the independent operators. It is doing that with a grand total of 22 buses in the Hereford bus depot. Unless each National Bus Company company is to be cut to less than 22 buses, such action would occur throughout the country. Utterly unregulated competition can lead to its own demise.
As for inspection, at least one traffic commissioner reckons that we shall need at least twice as much inspection as we have at the moment. I am waiting for some reassurance from the Government that that will be provided. It is exceedingly odd that people who want to apply for a heavy goods vehicle licence have to prove their


financial stability before being granted a licence whereas no such requirement will be necessary to run a public service vehicle if the Bill goes through in its present form.
As to concessionary fares, I am sorry to disappoint some of my right hon. and hon. Friends, but the chairman of Hereford and Worcester transport committee agrees with me that bus passes are difficult if not impossible to apply when there is a large number of operators. In those circumstances, it is almost certain that token systems will be necessary. Tokens only cause resentment.

The Parliamentary Under-Secretary of State for Transport (Mr. David Mitchell): What does my hon. Friend mean by a "large number" of operators making bus passes difficult to operate?

Mr. Fry: If the chairman of Hereford and Worcester transport committee thought it difficult with four or five operators in Hereford, I suggest that there must be many other parts of the country where the same will apply if the Bill goes through in its present form. I am merely taking the advice of those who ought to know.
My hon. Friend the Member for Hereford (Mr. Shepherd) has mentioned the north Herefordshire women's institute. It violently opposes the Bill and feels especially strongly on one issue. It believes that the county council should retain an important role in public transport. It is worried that removing the council's responsibilities will result in a deterioration of rural routes.
I should like to conclude by considering the fundamental issue. As with everything else, the fundamental issue is finance. The Association of County Councils—I am sorry to keep quoting it but I hope that my right hon. and hon. Friends appreciate that it is not hostile to the Government or our party — says that it would require a minimum of £30 million extra to keep services as they are today. If we add that £30 million to the lowest estimate of cross-subsidy being spent on non-profitable routes—about £120 million—we arrive at a loss, if cross-subsidy is ended, of £150 million. That has nothing to do with London, the PTEs or the metropolitan areas. It relates entirely to the shire counties, which many of my colleagues represent. Therefore there is a real danger that that money will not be forthcoming and that councils will find it difficult to maintain the current level of services. Obviously, there could be an improvement in efficiency, which could result in lower fares on busy routes, but I and most people involved in the intricacies of transport finance doubt that it could also provide for the loss of cross-subsidy.
Almost a year ago I listened to the Secretary of State when he spoke at the Bus and Coach Council dinner. He made it abundantly clear that his main determination was to reduce the amount of public money spent on subsidising the bus industry. I do not necessarily disagree with him. However, I cannot understand why we need this Bill to attain the objectives that he wants. Competition can be extended by competitive tendering. My right hon. Friend might even consider negative tendering on certain routes. But privatisation of the NBC is already impossible. If he reduces the NBC to too many units, some of his ex-hon. Friends at the Treasury may have some words to say about the sum he receives from the public in exchange for it.
My right hon. Friend can control the spending of the PTEs. There has already been a change in transport

supplementary grant. Already there is legislation to abolish the metropolitan counties, and he could replace them with any regime he wishes. All that is possible without the Bill. However, if we are to have the Bill, it needs considerable amendments. It needs amendments on tendering, licensing and the role of county councils, and there must be a great deal of reassurance on the question of finance. Without those amendments and that reassurance, I fear that the legislation, although welcomed by Conservative Members, may be viewed as the reforms in the Local Government Act 1972 are viewed. What appear to be a number of reforms may lead to an increased number of problems.
The Government have the opportunity in Committee to put right some of those points. I shall listen carefully to my hon. Friend the Parliamentary Under-Secretary of State when he replies. If he assures me, as I hope he will, that he will wait for the Select Committee report, and that he is prepared to accept meaningful amendments, I shall not vote with the Opposition. However, I warn him that if the Bill emerges from Committee in its present form, I shall have no hesitation in voting against it on Third Reading.

Mr. J. D. Concannon: I am aware of the time and the fact that a huge chunk of it has been taken from the debate. I am grateful to my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) and to the hon. Member for Wellingborough (Mr. Fry) for their comments, which will enable me to cut my speech even shorter than I intended. The hon. Gentleman's speech showed the worthiness of Select Committees. He has examined the legislation closely and warned his right hon. and hon. Friends on the Government Front Bench of the dangers. If his amendment is rejected, he will suffer what we on the Opposition Benches have been suffering for a long time. If it is rejected, I hope that the Government will be sufficiently gracious to ensure that it is reconsidered in Committee. However, I should not like to guarantee him that, considering the content of his speech.
During the general election I wondered what the right hon. Member for Cambridgeshire, South-East (Mr. Pym) meant when he said that he was worried about the Government having a large majority. As an ex-Whip I could hardly understand that because I had always thought that the larger the majority, the easier a Whip's job would be. Since then we have discovered that the right hon. Gentleman was absolutely right. A large majority means bad legislation. We have had to get used to democratic dictatorship. Some Bills that have been introduced have depended not on argument or content, but on the size of the Government's majority to force them through. They should never have seen the light of day, and if the Government's majority had been about 50 or less they would never have seen the light of day. This Bill is one of them.
The Bill has nothing to do with services, and a great deal to do with party dogma and the dogma of the Secretary of State. He could not care less about safety, concessionary fares, services, routes or even job losses and the growth of moonlighting that the Bill will encourage. The Parliamentary Under-Secretary of State does not need to visit Phoenix, Arizona to find out what happens when taxi services are turned loose. He will remember from his stint in Northern Ireland, as I do, what happened to the taxi


service and buses there. He knows the anxieties of insurance companies about the way vehicles are maintained and driven. I look forward to his reply.
The hon. Member for Wellingborough warned the Government about sensitive rural areas, and about the membership of various county councils. There have been rumblings among county councils and county councillors. The Government must accept that the Bill will be a major issue in the county council elections in May. Certainly in Nottinghamshire, where we are proud of our bus services and of what our county council has done for rural bus services, there is already consternation, and there will be more. There has been expansion there. It is not true that people in built-up areas do not care. The majority of councillors in Nottinghamshire county council, who represent areas, such as Mansfield, Bassetlaw and Ashfield, care. They could sit back and say, "It will not affect us very much", but to my surprise those councillors are more against the Bill than some Conservative county councillors. They seemed to acquiesce, but of late they have started to wonder about the political rumblings of people in those areas.
I have received stacks of briefing notes about this matter and others from my county council. I am obliged to my hon. Friend the Member for Crewe and Nantwich and to the hon. Member for Wellingborough that I do not have to discuss those matters now. I made a promise to make my speech as brief as possible, and so I shall. I hope and trust that if I am fortunate enough to be a member of the Committee—that is volunteering beyond the call of duty—this piece of political dogma will be considered thoroughly and properly on behalf of the people who will have to use the buses. I agree with the hon. Gentleman that there is no doubt that all the informtion that one can glean about the matter shows that there is a great deal of worry and consternation. I hope that the Committee stage will not be based on straight party political dogma. As I said, the county council elections will thrust this matter to the front of politics. I hope that the matter will be considered seriously. If not, the Opposition hope that the other place will again do its duty on behalf of the people who live in rural areas.
I have not gone into the nitty-gritty of the Bill, because it is not necessary for me to do so now. I promised that my speech would be short. I did not think that it would be as short as this. If we do not defeat the Bill tonight, which is what we want— we can win all the arguments but lose the vote—I hope that we shall take the Committee stage seriously.

Mr. Simon Coombs: It gives me great pleasure to follow the right hon. Member for Mansfield (Mr. Concannon) and my hon. Friend the Member for Wellingborough (Mr. Fry), who have demonstrated across the Floor of the House that there can be some consensus. Had I been called by you, Mr. Deputy Speaker, a little earlier, I might have said that some of the remarks of the hon. Member for Crewe and Nantwich (Mrs. Dunwoody) would have driven me away from that consensus.
It is fair to say that the Bill is a radical and imaginative set of proposals. It is right that the House should consider on Second Reading the Government's justification for those proposals, and I believe that they have made a case, at least initially, as to why some changes are necessary. The statistics for the decline of the bus industry are

spectacular. In three decades from 1951 to 1981, total passenger miles in Great Britain increased threefold, while bus and coach passenger miles decreased by a half. A 51 per cent. share of the market became an 8 per cent. share. Why was that? The growth in car ownership was equally remarkable, if not more so. That has provided a competitive pressure that must make nonsense of the idea that the bus industry is a monopoly. Competitive pressure from the private motor car is the most important consideration in judging how to deal with the future of the bus industry.
We must recognise another major change in social habits during the past 30 years. In the 1950s, the British were cinema-goers; in the 1980s, they are television-watchers. In the 1950s, local bus services could rely upon a third daily peak in travelling habits—an evening peak to be added to the morning and late afternoon peaks. When cinema attendances decreased, the financial viability of buses changed dramatically. As the cinema declined, so did the profitability of the bus industry. To that can be added the change from a six-day working week to a five-day working week, which also affected the viability of the industry. We must consider carefully the statistics of the past 30 years before assuming that all the blame for the decline lies with the bus industry.
The key to the Bill is clause 1, which will unlock the vast, rambling edifice of subsidy that has been built up over the years in the bus industry. Action is undoubtedly needed on this front. However, my quarrel is not with the bus industry, but with local politicians, especially those of the Left wing. The bus industry has fallen into their hands in many areas, and it has consequently suffered. Indiscriminate subsidy which seeks to prevent fares from increasing in line with inflation has done nothing to protect the industry from the competition of the motor car; it merely sucks resources from the local community in the form of rates. To the extent that clause 1 will lead to a reduction in subsidy, it is to be welcomed. Furthermore, the elimination of cross-subsidy implicit in the Bill should lead to lower fares.
In my constituency those who live in areas of Swindon such as Penhill and the Parks estates, who have low incomes or none at all, have been encouraged to believe by the opposition to the Bill that they will have no bus services in the future. On the contrary; they will be pleasantly surprised when fares are reduced. Why should they—the less well-off in society—subsidise those on higher incomes in areas where the motor car is a readily available substitute?
I wonder whether the Government realise the extent of cross-subsidy in the bus industry. If they have not yet had time to read the report of the Select Committee hearing evidence from the National Bus Company, I urge them to do so. The report makes it clear that £20 million to replace the money lost through cross-subsidy will not be nearly enough to meet the requirements of the industry, if it is to maintain present services.
May I say something about the effect of competition on the environment in which we must live. The conscientious transport manager—I have known many in my years in the industry—is constantly seeking to do two things. He will endeavour to amend services from time to time to meet changes in passenger demand, because he dislikes empty buses and he dislikes passengers being left behind at stops. He will also try to plan an integrated network of routes to cover his area. Attacks on monopoly and vested


interests are misplaced. It is in the interests of passengers to have a planned, integrated network of services on which they can rely, especially when they have no alternative means of transport. To the extent that the competition inherent in the Bill will hinder such planning, it is to be regretted. Passengers will not thank the Government for lower fares if dislocated services follow behind.
In this context, I would welcome a reassurance from my hon. Friend the Under-Secretary of State when he replies to the debate that the successful tenderer for a loss-making and, therefore, publicly subsidised route will be protected for a reasonable period from speculative competition. Such protection should not be necessary in normal circumstances, but its availability would engender confidence.
The proposals in clause 6 could provide the framework for a sensible regulation of the new system. It empowers the traffic commissioner to determine "traffic regulation conditions" to
prevent dangerous traffic conditions or reduce severe traffic congestion
by controlling routes, stopping places and lay-over times. In extremis, the traffic commissioner must have the power to refuse an application through a regulation which adequately safeguards the environment by banning a service in a sensitive area such as a town centre bus interchange point which is already over-congested. Conversely, I hope that the traffic commissioner will use clause 6(4) (d) to ensure that operators will offer services of reasonable fullness on a daily and weekly basis. That would provide a framework within which competition can flourish and the passenger benefit, as hon. Members on both sides of the House would wish.
I am sure that the Government do not wish to encourage cowboy operators, unsafe vehicles or stranded passengers. However, if they are to avoid those possibilities, they must strengthen the proposals. A framework for competition was considered right by the Government when British Telecom was liberalised last year, and a similar approach is entirely justified here.
I welcome the Bill's proposals to free the National Bus Company from state control and to reduce restrictions on the hiring of taxis. I welcome the drive to extend the flexible provision of transport into rural areas where profound social changes are taking place. There is a positive benefit to the nation in maintaining the rural population. I would also welcome a commitment from the Government to public transport in its true sense — transport for the public, not transport owned by the public. We need stimulation of fixed rail, overhead, underground and water-borne transport to reduce pressure on the road network.
The Government do not wish to destroy public transport, as has been suggested by the Opposition, but they want — rightly in my view — to reduce its costs. These proposals are at the least risky and at worst a clear threat to the level of public transport that we need, particularly in our towns and cities, to make the best use of our road networks. If the Government would consider fixing an upper limit to the permissible level of subsidy—say, at 10 or even 5 per cent. of income from fares, excluding concessionary fare contributions — it would meet the need to reduce public subsidy and would make enemies only among the far Left of the political spectrum.
To sum up, the Secretary of State reminds me of a character I once read of in a John Buchan novel who showed his bravery by going from a lighted room into the dark beyond. The Secretary of State has undoubtedly seen the light but he is now setting off into the darkness on an unknown path. There he may bump into the hon. Lady the Member for Crewe and Nantwich, the spokesman for the Opposition, which will be frightening enough, but he will also come up against some hard realities and some uncomfortable facts. The Secretary of State should travel carefully with the Select Committee's report under his arm, lest he should never arrive.

Mr. Ted Leadbitter: The hon. Member for Swindon (Mr. Coombs) began his speech by referring to an imaginative and realistic set of proposals that had been produced by the Secretary of State. He then referred to regulatory provisions that ought to be introduced in order to temper somewhat this state of imagination and realism. That is a dichotomy of thinking which in my experience is an attempt to back two horses at the same time when they are running in different directions. However, the hon. Member for Wellingborough (Mr. Fry) was far more constructive and realistic and showed a profound knowledge of the subject matter. The right hon. Member for Mansfield (Mr. Concannon) gave a crowning piece of advice, good sense and caution arising out of his ministerial experience in Northern Ireland.
We are left with the Secretary of State for Transport. He has been here for a long time, but he appears to have learned nothing. He has behind him many years of experience but they do not appear to me to reflect great credit upon him. Wherever he has been he has left behind him concern and destruction. He is a devastating character. He is the only person who has followed persistently the proposals contained in the White Paper and who has ignored the practical advice and experience of all those who are involved in the operational and administrative aspects of transport. These sources have put forward an overwhelming case against the Bill. The Secretary of State clearly is the odd man out. It is a very lonely position in which to be and illustrates the pathetic state of the Secretary of State's case. He is anchored to dogma. He knows that deregulation and competition turn back the clock to the period before the 1930s. Regulation, licensing, co-ordination and all the other trappings of a public transport service in the United Kingdom have come into existence since the Road Traffic Act 1930. The Secretary of State has been warned from all sides that times have changed. The transport problems of today cannot be solved from the experience of the past.
The Secretary of State is returning to the conditions of the 1920s. He is not looking forward. The future development of our transport services requires a modern approach that involves planning, co-ordination, co-operation and support in the national interest, but the 1980 Act got rid of certain licensing procedures.
What has happened? The Secretary of State boasts in his White Paper that bus services have improved and that fares have been reduced. However, on examination we find that the picture is not as the Secretary of State paints it. Much of that traffic has been taken away from British Rail. Consequently, British Rail needs further financial support in order to meet its increasing overheads.
However, the Secretary of State is adamant and has tried to pretend to the House that he has put forward a constructive set of proposals.
The Secretary of State wants to introduce something that is, as yet, untried. Nothing in the Bill has been tried and tested. There is no evidence to support what the Secretary of State wants. Furthermore, what is counterproductive he actually denies. What is unworkable he scorns. He refuses to admit that the Bill puts at risk the quality, availability and efficiency of local bus services. Sadly, we shall have to wait and see what is the degree of his recklessness.
All that we have before us now rests not on a better transport policy. If that had been the case, we should have had before us a measure that reflected the experience of well-established bus operators and the experience of county councils, district councils, passenger transport executives, the National Bus Company and the Bus and Coach Council. The private and public sectors would have been partners in assisting the Secretary of State, if that had been his policy. Instead, we have expenditure cuts presented in the guise of lower transport costs. Just as surely as this policy has damaged the education service, housing programmes and social services and has forced additional costs upon ratepayers, so in this case ratepayers will he faced with higher costs and poorer services.
The abolition of road service licensing will break up a well-established network of services. The urban areas will suffer and the rural areas will be further deprived. The needs of both will have little priority in the scramble that the Bill invites. I am afraid that this applies also to standards, safety and the environment. Cross-subsidy—the provision of services that no private operator will provide—will be lost. No town is without the problem of providing a service that is socially important but which is unable to produce adequate revenue. The provisions contained in the Bill fail to meet the problem. The case is well demonstrated by the debate on 25 October 1984 in another place.
Part IV of the Bill is an exercise in muddled thinking. District councils are expected to transfer their well-organised bus undertakings to separate companies. What has been developed by public demand, criticism, social needs and accountability is to be handed over to municipal companies. However, those districts councils will remain burdened with public sector spending and investment responsibilities.
Municipal companies of this kind will immediately face unfair competition, and in this regard the Secretary of State can say nothing to deny the damage that we foresee. Eventual inconvenience will be a further consequence to passengers, in addition to a higher cost to the ratepayer. It is clear that all this will result in grave losses to the community.
The first will be the scrapping of the present road licensing system. That has been well tried and has been described as a useful instrument for the development of good services. That will go, as will cross-subsidies. The National Bus Company and municipal bus services will be broken up. The obligation on county councils to co-ordinate public transport will also disappear. There will be widespread reductions in service levels, and whether or not the Secretary of State admits it, there will be an increase in fares. That is bound to happen. A poorer quality of service will result, with a lowering of safety standards and job losses in existing undertakings.
I am advised, and I have no reason to doubt it, that the Bill will remove power from local government but that direct powers in many areas will be taken by the Secretary of State. This approach reverses the policy, previously endorsed by all parties, that local decisions should be taken locally. The Bill superimposes an alarming amount of ministerial control, often without further reference to Parliament.
I ask the House to consider the enormity of that. This Government presented themselves to the country in 1979 and 1983 and boasted about the amount of choice and non-intervention in local government. They were telling the electorate, "We will set the people free." Yet since 1979 we have had a most abrasive Government who have indulged in daily intervention and have dictated to industry, voluntary organisations, individuals and corporations alike. They have become an arrogant Government. They will not listen.
We have already heard from the well-informed hon. Member for Wellingborough (Mr. Fry) how the Secretary of State has had the audacity to appear before a Select Committee—charged under its terms of reference with scrutinising and monitoring Departments—and after two and a half hours took no notice of its comments, even though they related totally and wholly to the subject matter in the Bill. No operating undertaking is listened to. In other words, everyone has wasted his time.
I am sorry to say it, but as usual the people will have to suffer the consequences of the Government's actions. However, time will tell, and this Government, through the person who seeks to emulate his Prime Minister more than anyone else, will again be proved wrong.

Mrs. Elaine Kellett-Bowman: I very much welcome the Bill. Over the years I have received many complaints about buses, especially in my rural areas. Only last November, a large headline appeared in my local newspaper drawing attention to the fact that a parish council was complaining bitterly that its bus service was "diabolical". It was absolutely right. Only a fortnight ago, an article in the local newspaper which was titled "First catch your bus" complained that passengers wanting to get from Garstang to Scorton boarded a bus marked "Scorton"—a reasonable thing to do—only to be turfed off a few minutes later by a bus driver who said that it was going nowhere. They finally tracked down the right bus, even though it was wrongly labelled. As the writer of that article said, it is hardly surprising that the Scorton-Garstang bus is under-used and that
on an average Thursday you could fit the passengers into a mini, let alone a mini-bus".
Small wonder that in Lancashire over the past 10 years, bus usage has shrunk by 46 per cent. and bus mileage is down by 14·3 per cent. while the revenue subsidy—this may delight Opposition Members — has risen from £93,000 to £8·5 million. This money has come out of hard-earned wages.
That is why I welcome my right hon. Friend's courageous efforts to provide passengers with decent bus services which go where they want to go, not where it is convenient for the bus company to take them, and at a price they can afford. I say "courageous", because my right hon. Friend knew very well that he was tackling not only the vested interest of the huge National Bus Company and the local authority bus services, which do not want


their effortless, comfortable monopolies swept away. More difficult, he was also tackling the "When in doubt cling to nurse, for fear of getting something worse" syndrome, which is exemplified on the Opposition benches.
However, even when people complain like mad about something, they still fear change. Believe it or not, the very parish council which complained that its bus services were diabolical was frightened of change. By then it had the expensive benefit of the Labour-controlled Lancashire county council's propaganda campaign against the reform proposals. One can get a lot of propaganda for 135,000 quid, including a photograph of the county council chairman in all the local newspapers. I understand that it will shortly be on the back of all the buses. That is a mighty useful election gimmick—just before the county elections — at ratepayers' expense. But following Westminster's successful case against ILEA, this expenditure may well prove to be ultra vires, and Labour councillors may be liable to pay it. It may also mean that she has opened her election campaign.
The fears which have been aroused are precisely those that were felt when the experiment in Herefordshire was about to begin. There are no such fears there now. Everyone is delighted with the service, and no one wants to return to the old ways.
It has always seemed such a waste of public money to have taxis with one child in them, or health service transport vehicles going around the country half empty. Therefore, I particularly welcome clause 80 which makes the services co-operate to achieve better value for money for ratepayers and better services for passengers.
Shared taxis, provided for under clause 9, will give the flexibility which buses lack and, provided they are full, at little, if any, higher cost then buses. There is no doubt that travelling in from a country district is now expensive.
Country areas do not need large buses. Nothing annoys people more than to see huge buses containing only one or two people lumbering around country lanes, when a minibus would to a better and cheaper job. When I have suggested this in the past, I have been told that the bus grants system made it no more expensive to buy a full sized bus than a minibus. If that is so, it certainly needs altering.
With new, flexible services and the grants for services in rural areas available under clause 89, I believe that the country dwellers in my constituency will get a much better deal.
Much deliberately misleading rubbish has been talked about concessionary fares. Clause 85 makes it abundantly clear that concessionary fares are in no way threatened, and local authorities can operate schemes as they think fit. I was glad that the Secretary of State answered a Labour allegation that it would be impossible for local authorities to run concessionary fares schemes, either because they will have no money to do so or because it will be difficult to operate a scheme when large numbers of private operators are involved. At present many of my constituents who would be eligible for concessionary fares cannot use them because there is no bus service going where they want to go. Under the provisions of clause 86 any operator can tender to operate such concessions and

the improved availability will benefit people in areas with poor services, including my old-age pensioners in inaccessible top-of-the-hill council estates.
One of the most illogical attacks on the Government's proposals has been on the safety aspects of buses. During the running-in period in Hereford, a lot of faults were found in buses, which were put off the roads by inspectors. This, of course, is exactly what tests and inspectors are for. I welcome the tightening of conditions for vehicle maintenance in clause 23 and the provisions to disqualify operators who operate dangerously or go in for such practices as bunching, so common now in all conurbations; the buses always run in flocks.
It is astonishing that the very people who profess to be worried at the imagined prospect of unsafe private buses on the road appear not at all worried by the published figures, given to me the other day, of safety test failures of National Bus Company vehicles. A failure rate of 40 per cent. on the first test in National Bus Company buses in the year 1983–84 is nothing to brag about, and the stricter standards will be welcome all round.
I appreciate that there is understandable anxiety among the staff of the National Bus Company and local authority undertakings, but there is also keen anticipation, and many employees are looking forward to getting a share of the action. Their appetite has been whetted by the knowledge that the employee-owners of the National Freight Consortium have seen their share in the consortium rise from £800 to £6,000, and it is still rising. Moreover, the consortium is able to plough back far more into new investment than the old company, so that is good for jobs in the manufacturing sector as well. The same applies to Tyne Shiprepair, doomed when nationalised and losing £12 million, but which now, after a workers' buy-out, has doubled its work force and is making a profit, so staff need not fear privatisation.
The Times summed it up splendidly when it said that the Government seek to eliminate quantity control while retaining quality control and to provide subsidies more related to need. All in all, I welcome the Bill and hope that my right hon. Friend will be in no way deterred by the orchestrated clamour that has been raised against it.

Mr. Donald Stewart: I am amazed at the cavalier way in which the hon. Member for Lancaster (Mrs. Kellett-Bowman), like some other hon. Members on the Government Benches, has said that if no buses are available one can always order a taxi. Anyone who knows what it costs to order a taxi in my constituency to go to hospital or to an airport will realise that it is not something that people can do every day of the week.
In his peroration the Secretary of State said that we cannot shirk reform. The use of that phraseology suggests to me that some unpleasant medicine is to come. A few may benefit, but most people will find the contents of the Bill very unpleasant indeed.
I cannot be the only Member who has asked why a Bill of this size and detail could not have awaited the report of the Select Committee on Transport. I was glad that the hon. Member for Wellingborough (Mr. Fry) dealt with that question adequately and in some detail. This is an important issue for the House. Although we know that Government are not bound by the findings of these Committees, at least they might recognise the time given


to them by Members. If this is to be the pattern, in time it will be difficult to get Members to serve on such Committees.
When the White Paper, the precursor of the Bill, was issued last autumn, it was clear that the Scottish Office had merely accepted the views of the English Department of Transport. My party, the Scottish National party, said then that if the proposals were implemented they would be ruinous to the existing network of Scottish bus services, because feeder services and urban services to housing schemes are in a completely difference position to the lucrative express services and services on main routes. If the profitable routes are hived off under the deregulation proposals, their profits will not be used to cross-subsidise the services to rural areas and outlying areas of housing which, although loss-making, are socially necessary. I was disappointed to hear it said that people in towns would not agree to pay for losses in rural areas. I think many councillors have a more responsible attitude than that to their duties.
My party has made it clear that we believe the White Paper proposals to be extremely damaging to Scotland. Our transport needs are different and are often based on a dispersed population in rural areas. These conditions are rarely mirrored south of the border. If anything, it can be argued that Scotland needs greater rather than less co-ordination of public transport.
On cross-subsidisation, I understand that the Scottish Office has said that a new rural grant will be introduced to cover the transitional period when such subsidies are being reduced. I would be interested to hear more details of this; perhaps the Minister will be able to provide them tonight.
The evidence gathered by the Scottish consumer organisation suggests that the proposals in the Bill are not welcomed in Scotland. That organisation has reported that, following a wide-ranging survey, only one private bus operator fully supported the proposals. Regional authorities within Scotland, of all shades of opinion, have heavily criticised the Bill.
It is also worth noting that the Government are pressing ahead with the legislation on the basis of no practical experience in Scotland. Experiments in deregulation have been carried out in England but there have been none in Scotland. In regard to the Scottish dimension, we are taking a great leap in the dark. I fear the consequences will be damaging. If the Scottish Office is determined to press ahead, it would be worth while considering at the very least a longer time scale for implementation of the plans and perhaps also the need for controlled experiments.
Many questions remain unanswered or not sufficiently answered. What additional resources will be made available to make up for the loss of cross-subsidy? What will happen in rural areas, like my constituency, where there may not be competition in tendering for a service? Will the local authority have to accept a tender which is considered very high? I hope that these questions can be answered by the Minister.
The Bill reflects the Government's zeal to allow market forces to prevail, regardless of the consequences. My suspicion is that their principal motivation is not to improve bus services but further to reduce public spending and to stamp their own brand of ideology firmly on the public transport system. The Scottish interest demands that the Bill should be opposed, and I shall vote for the amendment.

Mr. Colin Shepherd: I am grateful to you for calling me, Mr. Speaker, and I hope that you will make a rude noise if I wander near my time limit.
As I have listened to the contributions so far I have been reminded very much of the difference in attitude portrayed by two shoe firm representatives who went to Africa. The first one sent a telegram back saying, "Opportunities appalling; nobody wears shoes." The second one wrote back saying, "Opportunities absolutely magnificent; nobody wears shoes."
We can take a totally negative view on this exercise or we can take a positive view. Anybody confronted with the basic figures which show that there are far fewer passengers, far less bus mileage and far more money ploughed into maintaining this creaking structure has to say either that we do not do anything about it but dig deeper in our pockets, confident in the knowledge that the situation will deteriorate, or that we take a constructive view that something has to be done. I take the view that no responsible Government, confronted with the figures, can do anything other than address the matter seriously. The state of affairs is so serious as to warrant major attention rather than minor tinkering with the structure. That is the basis on which I view the Bill.
I have the pleasure to represent Hereford, which has been the subject of a trial bus deregulation for the past four years. It might be helpful if I briefly set out a few of the things that have happened in that trial. There are those who have approached this in a negative way, and have said that the trial has caused problems. I think that it has been a valuable experiment from which much valuable information has been gathered if one wishes to look at it in a constructive manner.
I do not know whether the National Bus Company, which has the main service in Hereford city, is typical of other bus companies in other parts of the country. However, before 1981 if I wanted to get nearly lynched, I went into High Town and asked people how long they had been waiting for the bus. I had a string of complaints — the bus did not turn up, the bus did not stop, the company did not bother., When I complained to the driver, I would be told to get on down to the back of the bus. When I asked Midland Red (West) Ltd. why the bus had not turned up, I was told that there was no driver or no engine or that it could not get spares. It was not a happy state of affairs.
The county council's figures show that in 1975, £87,000 was spent in supporting buses, and in 1983, £867,000. That is three times as much in real money terms. Before the experiment, there were declining services, especially on Sundays and in the evenings. As a consequence of deregulation in Hereford there is competition from smaller operators, although this took a little time to start. There are, in general, reduced fare levels, and in some cases they have reduced substantially. More important, this has induced people to travel on the buses more often, which cannot be bad. On a personal note, the flow of complaints has dried up. Furthermore, I cannot find a queue of people waiting for buses in the city. They have gone because they are on the buses, which again is not a bad thing.
My right hon. Friend the Secretary of State mentioned subsidies, and in Hereford the subsidy has gone down by 38 per cent. If one adds in the amount of saving brought


about by sensible use and co-ordination of school transport, we are talking about double that amount. If one saw that lying on the floor, one would bend down and pick it up. It would be worth while to do so because double 38 per cent. is a lot of money in anybody's terms.
All this has been done without reducing bus mileage in rural areas. We have commercial services operating without subsidy on routes that were previously operating with subsidies. We have managed to deploy ratepayers' and taxpayers' funds in such a way as to operate bus routes without a subsidy.
This is not necessarily just a cost-saving exercise, and my right hon. Friend the Secretary of State said that the Bill is aimed not at reducing subsidy but at making possibly better deployment of subsidy. If the county council wishes to put more services out to tender, to change the structure of the bus services, it can do so. It is significant that the same level of bus mileage—or 2 per cent. higher—can be sustained for less subsidy.

Mr. George Walden: I admire the tenor and spirit of my hon. Friend's speech, and he has had a great deal of experience. Has there been any difficulty when services have been put out to tender, the tender has been accepted but competition continues and the operation becomes difficult?

Mr. Shepherd: The question has not arisen because, as the service has been put out to tender it is, by definition, a difficult one, and the operator of the service runs it. No one has been interested in coming in in competition because it is recognised that there is not the volume of passengers for two companies. Potential competitors have turned their attention somewhere else.
Safety standards have been rigorously enforced in Hereford. We have had chapter and verse quoted about the failure of the safety standards, but that is because of the rigorous enforcement of the inspection of vehicles. We cannot, and I do not want to, complain about that. That is as it should be. Nobody should enter into this game unless his vehicles are in good nick and he can keep them in good shape. He must recognise the name of the game before he comes in. I pay tribute to those who have come in, who have learned their lesson the hard way, who are succeeding and who are determined to stay in.
It would be wrong to say that we have not had problems. There have been environmental problems, buses have bunched and have been standing over. However, in developing this Bill, my right hon. and hon. Friends have sought to overcome this problem. One can either throw the baby out with the bathwater and say that this problem is too difficult to solve, or one can say that the prize for solving it is enormous and therefore, solve it we must. There must be a constructive approach to resolve the difficulties that result from the nature of the competition. The provisions of clause 6 are essential in this respect.
What has been the competitive reaction? Midland Red (West), the National Bus Company in Hereford, set out to win the competition. It has massive resources and its buses were operating only on what were seen to be the effective routes. It improved its performance by 25 per cent. and its attitudes to the customers changed. People riding on buses in my part of the world say, "Do not let this go back to where it was because the bus operators will stop being nice

to me." That is a small point, but it reflects through the whole ethos of bus operations. The customer matters. We should be thinking of him because buses are about customers.
The Midland Red (West) has tried hard to swamp competition, as has been said. Massive numbers of buses were poured in to try to swamp the opposition and wipe it out. However, if the company had to compete on all fronts it would not be able to pull buses in to try to obliterate the competition. As it is, the company underestimated the determination of travellers in Hereford to sustain two bus companies on routes.
At the moment we have what I am told by the Opposition is a disaster. Midland Red (West) tells me that it is making money like it has never made it before, without taking a penny in subsidy from Hereford. It also told the Select Committee and Ministers that. The independent companies have no wish to leave the scene. The ratepayers, via the county council, are paying less money and the level of fares is lower, so for the most part buses are serving passenger needs better and more efficiently.

Mr. Roger Stott: rose—

Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. The hon. Member for Hereford (Mr. Shepherd) has had his 10 minutes, so there is no time for interventions.

Mr. Stephen Ross: We are grateful to the hon. Member for Hereford (Mr. Shepherd) for giving us his experiences. I think that he will agree that Midland Red (West) Ltd. accepts that it was providing a rather poor service before competition was brought in, but it has managed to pull up its socks since then.
I shall not attempt to argue that there is no need for competition in the bus industry. Nor shall I pour cold water on the idea of further experimentation to reduce the costs. These are obviously necessary. However, I seriously question whether a Bill running to 114 clauses and seven schedules is necessary to achieve those ends when we already have the Acts of 1980 and 81 on the statute book. Some of the remedies proposed in those Acts, certainly those of the Public Passenger Vehicles Act 1981 have not been fully tested.
It would be foolhardy to rush into this measure so soon after the publication of the White Paper, which was only last July, particularly in view of the huge numbers of concerned representations that have been sent in by the various and varied interested bodies. The Select Committee alone received more than 160 detailed depositions, and more are still coming in. It is regrettable that we could not get our report out before this debate, because I believe that there is a reasonable chance of achieving a fair measure of cross-party agreement on at least some of the proposals. I support the amendment so ably moved by the hon. Member for Wellingborough (Mr. Fry).
I am afraid that the Government, in their almost total but naive belief in market forces, think that such policies will solve all our problems. This measure will, however, unnecessarily destroy what is in many parts of the country a very fine bus network. I include the service in my constituency in that description. As far as I can discover,


only The Times fully supports the Secretary of State. That is not surprising and is no commendation under that newspaper's present management structure.
It was claimed at Question Time recently that the Association of County Councils fully supported this measure, but its latest brief hardly bears that out. The Secretary of State has certainly stabbed the association in the back, despite the cosy chats at Marsham street with Councillor Ron Carrington of the Hereford and Worcester county council. Because he pioneered the Hereford area trial, the Department should have listened to his views. Once again, under this Government, locally elected representatives are to be made the unhappy whipping boys of the Department of Transport, while the real power passes directly to appointed bodies — in this case, the traffic commissioners.
As a member of a county council and a former representative on the ACC, I believe that it is high time the ACC took the gloves off in dealing with this Administration. As the association rightly says, it is a grave error not to give the counties the registration function with powers selectively to grant protection to subsidised services against the creaming off of profitable traffic by competition on the road. The co-ordinating role provided under the Transport Act 1978 is greatly weakened by the measures in the Bill, and the traffic commissioners' remoteness will not help.
The success—such as it was—of the Hereford trial area, even down to the publication of timetables, owed a great deal to the county, its chairman and officers. I accept that there are successes, but there are also disappointments. In fact, only two private operators are left, one of which is supposed to be pulling out. The Secretary of State should have taken much more notice of the county's representations. The county put a great deal of effort into that scheme and deserves some credit. Its co-ordinating role will be diminished to a large extent by the Bill.
It would have been far more sensible if a trial in an urban area had been pursued first. For example, in Plymouth outside consultants have been employed. In a detailed report, which I expect hon. Members have received, those consultants cast grave doubts on the costs and claimed advantages mentioned in the White Paper. They calculate that the proposed changes could increase rates in Plymouth by 22 per cent. They remark that Plymouth boasts a good bus system that costs the ratepayers relatively little. That is the case in many other parts of the country. Why destroy that system?
The outcry against cross-subsidisation is levelled especially at rural experiences. Insufficient attention has been given to the desirability of cross-subsidisation in urban areas. The changes will impose severe difficulties and certain cuts on my constituency. We unashamedly increase charges in the summer to pay for winter services. At present, about £500,000 of cross-subsidy comes from some of the profitable services whose profits are made in the summer months. That cross-subsidy, added to the £250,000 subsidy from the Isle of Wight county council, is needed to retain the uneconomic services. If the socially desirable services are to be saved by the Isle of Wight county council, the council would need to treble its present subsidy by taking money from the rate support grant. That could happen at a time when local authorities have less money available to them from central Government. The £20 million extra from the Government will do nothing to

alleviate this problem. I believe that about £100 million would be more realistic. Even the Government's figures seem to show that at least £60 million is necessary.
Deregulation of taxi operators outside London is highly dubious. Such a scheme certainly did not work in parts of the United States. Privatisation of the National Bus Company by splitting it into smaller operating units is unlikely to be successful. I believe that the proposed break-up of the municipal public transport authorities is a retrograde step, especially in a place such as Tyne and Wear which, by common consent, has built up the finest co-ordinated transport system in the country.
The future of concessionary fares does not bear thinking about. It is time that the House insisted on the rest of the country being treated like London. Unfortunately, that measure was not written into the Tory manifesto at the last election. Undoubtedly, existing schemes and through booking arrangements are at great risk, especially if my Sealink experience is anything to go by—I suspect the members of the Select Committee expected me to make that point. Great difficulties have been experienced trying to maintain through bookings. Concessions for disabled drivers have been virtually removed.
I am concerned about the inclusion of clauses 94 to 100, which relate to rail services. I know those measures were included because of suggestions by a previous Select Committee. I believe that the time has come to halt all rail closures and even to reopen some lines. Our small overcrowded island cries out for a comprehensive rail network. The continuing chapter of hideous road accidents should persuade us of the need to preserve these priceless assets. We require more, not less, co-ordination; more, not less, co-operation; and more, not less, local involvement.
If enacted, the Bill will cause chaos. It will unnecessarily destroy what is good and replace it with an inferior product. It will lead to altercation and interminable disputes into which the police will inevitably and unnecessarily be drawn. I suggest that that is the position in Hereford. The Bill may lead to cheaper fares in the short run but, in the long term, the consumer, wherever he lives, will come to cuss the very mention of the name of the Secretary of State.

Mr. Robert B. Jones: I warmly welcome the Bill. We have seen an era of declining bus services and rising costs. They have been reflected in the rising subsidies that have been necessary.
I started in local government a long time ago at the age of 22 on St. Andrew's burgh council. During the first year in which I was a member of the council, Alexander's bus service, which is part of the Scottish Bus Group, asked for a subsidy for the first time. That bus company was given a subsidy. The next year it came back for more, and so on. No attention was paid to whether that service was provided in the best and most efficient manner possible. I believe that a stimulus is required to make such companies examine better ways of operating.
Not surprisingly, there has been a decline in rural services because of increasing car ownership. That has occurred partly because the ordinary public believe that it is desirable to own a car and partly because of necessity. There are unreliable bus services in the towns. I receive many letters—my hon. Friend the Member for Hereford (Mr. Shepherd) has received such letters also—from


constituents complaining that a bus due to arrive in their area of Hemel Hempstead did not turn up one morning. Sometimes the reason is a lack of drivers or maintenance, but often the reason is that a bus driver has slept in and has driven straight on to the next set of stops. That is unacceptable. When I ask people in factory canteens about the biggest problems in Hemel Hempstead, the inadequate bus service is their main criticism.
In contrast, we have the experience of the deregulation of the inter-city services. I am surprised that my right hon. Friend the Secretary of State did not mention the incredible success of the commuter coach services, especially around London, which have been of great benefit to my constituents and have resulted in their being able to continue to work in London. They would not have been able to afford to stay in their jobs if they had been forced to rely on an out-dated and inefficient public transport system. That is the scene behind the White Paper and the Bill. Proposals have been made for extensive deregulation, but I believe that it is important to stress that we are not considering total deregulation. The proposals rightly pay attention to the need for more safety regulations.
There are, or should be, two objectives in our policy. We must have a more reliable, flexible and less costly service for the consumer, and secondly, we must make sure that we give the public the best value for money.
For the consumer, safety is probably the absolutely essential requirement, so I welcome the Government's commitment to an increased regime of safety requirements. I make two further points on that score. First, if the safety inspections are to be effective, the penalties must be swift and there must be no question of matters dragging on as a result of a contested appeal system. Secondly, I commend to the Secretary of State and to my hon. Friend a three-tier system in which an operator could lose part of his licence for one route or his licence for all the areas in which he is operating under this Bill, or could lose his operating licence for all bus services whether under this Bill or not.
On flexibility, much has been said about the ability to introduce taxis or minibuses as an alternative to buses, but little has been said about the possibility of co-ordinating rural bus services with the school bus network. Here, I believe, there are possibilities of real savings. During the past fortnight in my constituency, a rural route running from Potten End to Hemel Hempstead was cut by the county council. It was replaced immediately by a private contractor who, because he was operating on a school run, was very willing to continue during the rest of the day to provide a service for the ordinary passenger wanting to go and shop in the town. The service is now more regular than ever it was before the county council service stopped.
The evidence concerning prices is staggering. The most comprehensive report is the 1980 production by the United Kingdom Transport and Road Research Laboratory. It produced the statistic that the mean fare in areas covered by private bus services was 25 per cent. lower on rural and inter-urban runs than in areas covered by public sector contractors. This is hardly surprising. The reasons were that they used lower-cost premises, had greater flexibility of staff, including part-timers and mechanic-drivers, had more one-man operations and used more small vehicles—a correct response to the market.
As regards value for money, I believe that the prime consideration should be competition. If the same or a better service can be provided at the same or a reduced cost, that is the essential test of efficiency. But we must make sure that that competition is fair and frequent. It is no good having competition with municipal bus services if they are not putting their assets in their accounts at a proper valuation or are in various other ways seeking to lower the costs that would appear in a normal private sector company's accounts.
Similarly, it is no good having large undertakings able to buy routes. Therefore I welcome the proposals of my right hon. and hon. Friends for breaking up the National Bus Company. However, I must ask why this does not apply to London, where, above all, it is needed.
I want to put a question to my hon. Friend on creaming off services, which I hope he will reply to in winding up. How would the competition requirements work where, say, the middle part of a route might well be profitable whereas the two ends would, under the present system, be unprofitable? Surely the answer is to make sure that the route is treated as a whole and is subject to competition.
This Bill will be a tremendous advance for the bus passengers in my constituency. I am sure that they will find they have a better service, as has already been proved in the one area which has undertaken to operate a private sector service in advance of the Bill.
I commend this Bill to the House.

Mr. Gordon Oakes: We have heard in this debate about the effect that this Bill will have on passengers, and I think that there will be quite devastating effects, particularly in rural and suburban areas. My hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) explained, quite rightly, the effect that this Bill is going to have on road safety. I should think that in the chaos that will result from the operation of this Bill thousands of people will be injured, maimed or even killed in the rat-race competition that will exist on the roads. It is the biggest setback to road safety that has ever come before this House.
I do not want to pursue those lines in the limited time available to me, because I speak as a sponsored Member of Parliament of the Transport and General Workers Union, which is the union most affected, and indeed a member of the passenger branch of that union. I want to talk about the impact that this Bill will have on the jobs of drivers, conductors and inspectors in the PTEs, in the municipal bus undertakings, in the National Bus Company and, not least, among taxi drivers, whether employees or owner-drivers. They have not been mentioned a great deal in this Bill and they are seriously affected by its provisions.
The whole Bill is quite explicit that manpower will be reduced, and it is my contention that this will be effected by severe reductions in services. Certainly the services will exist on the more profitable routes, as has been said in the debate, but in the rural and suburban areas services will disappear altogether—that will be the effect of this Bill—and jobs will be lost as a result.
On the question of manpower, the explanatory memorandum states:
Public sector manpower will decrease by some 50,000 as a result of the transfer of the operations of the National Bus Company to the private sector; a further decrease is expected as a result of improved efficiency in public sector bus operations.


What that means is that services will be cut.
On page ix, it is stated, in reference to the public sector:
the transfer of the bus operations of PTEs and of district and regional councils to companies will involve transitional costs (mainly on professional fees) of about £1m. Where competition causes a reduction in the scale of some public sector operators, there may be redundancy costs.
There will be redundancy costs on a very large scale indeed. Let us take the 50,000 employees of the National Bus Company, that highly successful, efficient and profitable nationalised industry which the Secretary of State is aiming to destroy. Clearly the Government do not envisage that all 50,000 will merely change their employer. Jobs will go. The competitive successor companies will not run routes to rural villages. They will not run in the evening or on Sundays. It would be quite contrary to their purpose so to do because their raison d'être is to make a profit, not provide a service. So many more thousands of jobs will be lost in that sphere.
The same applies to the companies which will succeed the municipal undertakings. They will not be competing fairly with the privateers. The Secretary of State has seen to that in this Bill. They will be competing with one hand tied behind their backs, waiting for the day when the successor companies that he has created disappear again entirely into the private sector.
The privateers are in this business for profit, not for the comfort, safety or convenience of passengers. They will cut down to the bare minimum that they can get away with in questions of maintenance and cleanliness, because not to do so would reduce their profits. The people they employ need not be full-time bus men. As long as he holds a PSV licence there is nothing to stop a driver working for a number of firms or working in a completely different occupation at night or during part of the day and then moonlighting as a driver for low wages and in bad conditions. Does the Secretary of State know the sort of wages that many private coach operators pay their drivers? The men are often paid pin-money wages in the hope that they can make up their wages in tips. These are the people who will be the first to jump at the pickings to be had from becoming privateers under this Bill.
Indeed, the Bill recognises that there will be lower standards. Clause 81(3), which deals with tendering for subsidised services, says quite specifically:
An invitation to tender under this section may not include conditions with respect to the terms of employment of persons to be employed in providing any service to which the invitation to tender relates.
They must not even look at service and the conditions of the drivers in the particular industry.
I have already mentioned taxis and taxi drivers and hire cars. Clause 14 takes away powers which have existed for nearly 140 years to limit the number of taxis. What will be the effect of this on, for example, the owner-drivers so dear to the Conservative party? Many people in my constituency invest their redundancy pay in taxis. Are we to have unlimited numbers of taxis plying for hire on the roads? Many will go out of business. Their owners will lose their livelihoods and their businesses. That will be the effect on them of unbridled competition.
Some of the Bill's provisions are ludicrous. Let us take the provision in clause 9 that deals with carrying passengers at separate fares. As a result, needless competition with buses will be created. I ask hon. Members to imagine the situation at 11 pm on a Friday or

Saturday night, when four people sharing a cab all want to go to different destinations. Who will be dropped off first? Who will be dropped off last? Who is going to pay what? Which direction will the taxi take first? After squabbling and fighting with one another, the passengers will probably all turn on the poor taxi driver. That is the effect that clause 9 will have.
By any standards this is a bad Bill. I agreed with the hon. Member for Wellingborough (Mr. Fry) that even if the Secretary of State wished to pursue his mania for privatisation, he could have done so in a far better way. For example he could have considered franchising. I would not have supported that, but the fact remains that he should not have wiped out road service licensing, as he has done in the Bill. The only thing that gives me some comfort is that if the Bill is enacted it will come into operation on 1 October 1986. It will take six to 12 months for the chaos resulting from it to come home to the people, and the effects will particularly hit those in the rural and suburban areas. That means that their dissatisfaction will coincide with the date of the next general election. Conservative Members will have many difficult questions to answer in those constituencies affected, and will probably lose them as a result of going through the Lobby tonight.

Mr. Tim Eggar: Whenever I listen to trade-union sponsored Opposition Members, I reflect on what their forebears would think of them. Those who came in in the late 19th century full of radical ideas that were right for their time have been succeeded by people who oppose every change and are the most conservative Members of Parliament.
My right hon. Friend the Secretary of State has rightly chosen the most radical option open to him — the introduction of competition into an area that has become almost synonymous with monopoly. Slowly and imperceptibly over the past 50 years the bus services have come to be run for the benefit of the operators and their staff and not for the benefit of the customer. Too often timetables are suited to vehicle availability and not to consumer demand. Too often urban and rural bus routes owe much more to history than to present requirements.
Nor is it surprising that monopoly operators' costs are considerably higher than those of the private sector. There is no spur to efficiency. Whenever losses increase, they simply go back to their sponsoring councils and ask for an increase in their annual subsidies. For them there is no danger of lost jobs or of a visit to the bankruptcy court. For many years there has been no true competition.
It is not only the operators whom we must blame. Far too often councils of all political persuasions have forked out subsidies without proper scrutiny. For some councils, particularly in the municipal areas, a subsidised and inefficient public transport system has become part of their political creed and has become necessary for dogmatic reasons, at whatever cost. Others have either bowed to local political pressure on routes or have simply failed to compare the subsidy required by their operators per mile with those of similar operators in other parts of the country. They have simply failed to use sensible housekeeping techniques.
We cannot say with absolute certainty what will happen as a result of the Bill. Competition breeds uncertainty and the market's reaction is unpredictable. However, like


other hon. Members, I can say what is likely to happen. We know what happened with the deregulation of long-distance routes. We know that many new routes have come into being, that there has been a real fall in the level of fares and that there has been a dramatic increase in the number of passengers. We have heard from my hon. Friend the Member for Hereford (Mr. Shepherd) about the happy experience in the Hereford trial area. We know about the experience in Norfolk, where the same service was run for a considerably lower subsidy. We also know that the National Bus Company and other public sector operators have considerably higher costs per mile than their private sector competitors.
So the evidence is that there will be an increase in the services available and a decrease in the subsidies needed as a result of the Bill. Yet we must bear in mind that replicating the success of the Hereford trial area and of the long-distance coach deregulation depends crucially on the detailed implementation of the Bill. For example, there would be little point in simply denationalising the NBC as a whole. That would simply create a private sector monopoly where we previously had a public sector monopoly. If we are to obtain proper competition, the NBC must be split into a number of relatively small units. They must be small enough so that they can be bought by local management and employees, and so that their size and ability to absorb interim losses does not deter private sector operators from entering the market. Yet they must be big enough to compete with the municipal operators and the PTEs.
There is no ideal size for any one part of the country, but each different unit must be looked at from the standpoint of the market, and the competition in the area. My right hon. Friend the Secretary of State must make it clear to the management of the NBC that he will judge its proposals on its ability to increase competition alone.
My right hon. Friend must also be careful about the way in which he allows councils to tender for routes. We have seen evidence in the NHS of the way in which tendering terms can be rigged to favour the in-house work force. There is a danger that unless my right hon. Friend is extremely careful, the same sort of factors will operate in tendering for bus routes. Through the tendering process, my right hon. Friend must ensure that we maximise competition. He must not be afraid to react very quickly to enforce the splitting up of the large municipal operations and the PTEs where that would increase competition.
I firmly believe that the Bill will result in better services, lower fares and lower subsidies, and that it will be good for the consumer, the taxpayer and the ratepayer. But the passage of the Bill will not, in itself, guarantee that. I look to my right hon. Friend to ensure that he takes every decision with a view to increasing competition.

Mr. Harry Cowans: I apologise in advance to the House because I am a member of a Committee that is sitting upstairs and I shall not be here to listen to the Minister's concluding speech.
I would have found the speeches of many Conservative Members more credible if there had been some sign at the beginning that the reasoned amendment would be accepted. The Select Committee took evidence from passengers, operators and others involed right across the

industry. The Secretary of State would have us believe that people really want the Bill. He could easily have proved that by accepting the reasoned amendment. All the evidence would then have been available to hon. Members, who could have made up their own minds on the matter. But the truth is radically different. If the Minister does not intend to accept the reasoned amendment, there is an onus on him to prove that the Bill will work.
On the balance of evidence presented to the Committee, at least there were expressions of grave concern, many of which came from bodies that normally support the Conservatives, and at worst there was outright opposition. But alternatives were proposed also. The amendment asks that the report, of the Transport Committee be made available to all right hon. and hon. Members so that they can make up their minds on the evidence presented to it before the Bill is enacted. We are not asking for a great deal. I speak now as Chairman of the Select Committee on Transport. We worked long and hard and we took advice from everybody who asked to appear before us. The benefit of that evidence should be made available to the House.
What are we asking the House to do? The Committee will be in a position to present its report to the House within the next two weeks and all the evidence for and against could then be made available to hon. Members. That is all I wish to say as Chairman of the Committee.
If the Minster is not prepared to accept the amendment, I can draw only one conclusion, that he does not wish right hon. and hon. Members to have the benefit of this information before they make up their minds. When the Minister winds up, I hope that in his opening words he will say that he accepts the amendment.
I acknowledge that the Bill states that people can operate concessionary fare schemes. Of course they can. But what good is it to have a brand new pass tucked in one's top pocket or handbag if the service one wishes to use no longer runs? That is precisely what happened in Hereford. Five and six buses arrived together, with large gaps between the services. Conservative Members may laugh, but I shall quote one of their supporters, a busman who went to the other place. Referring to Hereford, he said:
There are not enough passengers to justify the number of buses which fill the narrow streets of Hereford, upsetting the shopkeepers and others. It is perfectly obvious that there is wasteful competition. The position is unstable and it must be a matter of surprise that it has continued in this way for so long.
That was one of the Government's supporters speaking, yet Conservative Members have the audacity to try to convince the Opposition of the rightness of their case. This same supporter said of the trial area in Hereford:
But, looked at as a prototype for the rest of Britain, scrutiny of this gem shows that it is no more than paste."—[Official Report, House of Lords, 25 October 1984; Vol. 456, c. 307.] I think that we would all applaud that.
As to the Tyne and Wear metro, is it not ironic that there was a system that was the envy of the world—even the Minister and the Secretary of State thought that it was a marvellous concept, and have said so—yet the co-ordinated transport system which made it possible is to be removed from the local authority? Surely if one believes that something is marvellous, one does not remove the means of building it up.
There is no provision in the Bill to deal with the congestion that will occur in city centres. The objective of


private operators is to make a profit, and they will pick up the lucrative routes and operate at the peak times. As a result, there will be a massive build-up in city centres with no controlling provision in the Bill. This will lead to a free-for-all. If the Government are so worried about the consumer, they might give a passing thought to the pedestrian.
There is no sense to the Government's argument on the rural lines. The Conservatives forget that it was they who changed the legislation. It was they who made it easier for a person to obtain a licence by application to the traffic commissioners. The only criterion applied by the traffic commissioners under the previous legislation was that, as long as it was not against the public interest, the applicant could be granted a licence. If that is so, where are the queues of people making application under the provisions of that Conservative legislation? I was a member of the Standing Committee which considered that legislation in its passage through the House. At that time, the Conservatives claimed that people would flock to apply for licences. The Conservatives sponsored that legislation, yet they now have the audacity to complain about the lack of rural services. That legislation did not work, so it is back to the drawing board. But I have news for the Government: this Bill will not work either, and it will be back to the drawing board once more. In the meantime, the people whom the Government are allegedly looking after—the poor, the weak and the disabled—will be deprived of services.
Who on earth wants to run a bus service that does not make a profit? Conservative Members talk about free competition. It is an irony that it is all right for the local authority to subsidise those services on which it cannot make a fast buck, but the Government will not permit competition in a free market. The Bill is concerned with hiving off the lucrative runs for private enterprise, with the local taxpayer having to pick up the leavings.
Even the Minister did not claim, as did the hon. Member for Enfield, North (Mr. Eggar), that Hereford was a success. Nor, indeed, did the White Paper claim that it was a success. Does not the hon. Member for Enfield, North find it strange that not one trial was undertaken in a major conurbation, yet it is the major conurbations which will have these schemes thrust upon them?
I believe that, just as happened in the case of the Local Government Bill, it will not be long before this matter is back for consideration in the House when the Conservatives have mail bags full of complaints from people who cannot get buses, and once again it will be back to the drawing board.
It is not too late to amend the Bill and to consider the options that will emerge from a study of the report of the Select Committee. I have heard Conservative Members claim many times that they will put the country back on its feet. I did not realise that this was how they intended to do it.

Mr. Matthew Parris: There were good reasons for the hon. Member for Tyne Bridge (Mr. Cowans) — the Chairman of the Select Committee on Transport — not being able to visit Hereford and Worcester, and I do not criticise him for that. However, I' went there and what I saw convinced me that the experiment in that area had been a terrific success.
I am a member of the Select Committee, as is my hon. Friend the Member for Wellingborough (Mr. Fry). I do not think that it was right of him to talk about Hereford and Worcester in the way that he did and about the reservations that some people expressed about some of the effects of deregulation, without at least mentioning that everyone to whom we spoke who actually used buses was convinced that the experiment had improved matters and did not want to return to the previous system.

Mr. Stott: When the hon. Gentleman visited Hereford and Worcester, did he speak to the planning officer of the city of Hereford and obtain his views? I have met that gentleman on no less than three occasions, and he maintains that the experiment in the city has put back environmental improvement for at least 20 years. He said that the experiment was a total disaster.

Mr. Parris: Members of the Select Committee spoke to many members of the council, and I think that the planning officer was a member of the panel that we interviewed. I asked the panel members whether they used buses. Not one of them did, other than a Liberal councillor to whom the other members deferred for experience of how services had improved under deregulation.
I shall not vote against the amendment moved by my hon. Friend the Member for Wellingborough, because I, too, regret the fact that the Government are going ahead with Second Reading before they have had time to see the report that the Select Committee will produce shortly. However, I shall not withold my support for the Second Reading of the Bill because I am sure that deregulation will bring real benefits to the bus industry and its passengers.
Let us imagine that Britain did not have a system of free competition for the sale of food and household goods. Let us imagine that county council policy — quite understandably—was to seek to ensure that each locality was served by one adequate licensed grocer's shop. In return for the award of an effective monopoly, the county council quite properly attached to the licence conditions relating to the range, quality and price of the goods and the hours of opening of the shop. The argument for monopolies—quite plausibly—would be that it would be inefficient to duplicate facilities. The argument for attaching conditions to a licence—equally plausibly—would be to prevent the abuse of monopoly.
Let us imagine that it was common practice to grant licences to operate groceries in profitable populated localities on condition that the grocer was prepared to accept groceries in unprofitable areas where the shops met a social need, but where no reasonable profit could be made. Let us imagine that the Government of the day proposed to deregulate that market, allowing people to set up groceries wherever they liked, often in competition with each other, some even—if I may make such a preposterous suggestion—next door to each other. What would be the reaction? I think that I would be right to assume that deep alarm would be felt on both sides of the House and throughout the country.
A Select Committee, genuinely anxious to hear from all who wished to testify either for or against the proposal, would have invited testimony. Learned men would have volunteered—professors and retailing consultants. They would have explained why the supposed benefits would not have materialised. They would have said that the demand for over-the-counter groceries was not elastic—


one either needed a bar of soap, or one did not. They would have concluded that prices ultimately would be pushed up, not down, as a finite volume of trade was spread over an expanding number of outlets and retailing hours.
The shop workers' union would have given evidence. The spectre of bucket shops, part-time grocers, amateur grocers and moonlighting grocers would have been raised. After that, the Committee would have taken evidence from the local authorities. It would have been genuine, earnestly felt evidence. The men who gave it would have been intelligent and hard-working people, convinced of the value of their labours. They would have told us how they were using their licensing powers creatively and imaginatively to promote standards of social provision, good practice, helpful service and adequate stocking.
Their evidence would have been persuasive. They would have told spine-chilling stories—true stories—of pirate corner shops overcharging, of cut-throat competition, of elderly people being confused about prices, weights and measures, and they would have raised the spectre of the get-rich-quick grocers creaming off the profitable passing trade in Tizer and fairy cakes, leaving the good old licensed stores to look after the old people, the housewife and the sale of pints of milk and loaves of bread where no easy profit could be maintained. They would have said that only a licensing system could sustain such practices. They would have assured us that it would be a mistake to put our faith in a free market for the sale of groceries.
Our faith would have been shaken further by a delegation from the Association of Trading Standards Officers. Its evidence would have been grave and sincere and full of foreboding. Disinfection, refrigeration, stock turnover and due respect for sell-by dates would all have been earnestly discussed. Salmonella would have been mentioned in passing. They would have suggested that food standards would be the first casualties in a trading war between grocers. They would have said that when the war was over the newcomers would revert to high prices and low standards, and the county would have lost its licensing authority to prevent that.
Hot on the trail of the counties would have come the metropolitan authorities. They would have explained the integrated retailing policy that they had developed in their areas — the right shops in the right places; shopper representation on the board of every store; consumer education to encourage wise purchasing policies by the shopper and a controlled distributive trade to ensure the minimum number of lorries to deliver efficiently. They would have detailed all those great benefits, and the eyes of the members of the Committee would have opened wide at the thought of all those great benefits being threatened by deregulation.
My hon. Friend the Member for Wellingborough would have stepped forward, olive branch in hand and said, "Let us admit that all has not been as it might have been with the grocery trade. Let us confess that certain stores could be better run and that some supermarket chains have taken licensing authorities for a ride. But gentlemen, we can deal with that in a civilised way without all the vulgar instability of a free-for-all. Let franchising for the running of shops be put out to competitive tender. Let the bargaining and the cut and thrust of competition take place

not on the streets with shoppers as the hostages, but in the smoking room, between county councils and the established grocers."
What would the Committee have concluded, having heard all that evidence? Would it be conservative and advocate the retention of the status quo, or would it have dared to be radical and recommend the excitement and uncertainty of competitive tendering for a grocer's licence? Only time will tell. All that can be said with confidence is that, having considered whether there should be a free-for-all in shopkeeping, with two or even three grocers competing for the same custom in the same area, the Committee would have heard little to convince it that such a regime could possibly be acceptable, and much to persuade it that it could not.
When members of the Select Committee were in Hereford and Worcester, seeing for themselves the effects of deregulation, as I came out of the meeting having heard an afternoon's evidence, a lady bus passenger asked me whether she could give evidence. I said that it was unlikely that the Committee would hear her unless she was part of a body or represented an organisation. She asked how she could tell the Select Committee that the bus passengers in the town approved of deregulation. I suggested that she asked people to sign a petition. She walked out of the hotel foyer, and in the next post to London came a petition with 100 signatures from people who used the bus service to that lady's council estate. All of them said that the service had improved immeasurably since Midland Red (West) Ltd. had lost its monopoly and that they did not want a return to the previous position.
I know that my right hon. Friend the Secretary of State believes, as I do, in a free market, and I know that he has faith that the free market can bring benefits. One journalist says that he is batty. If to believe that human beings may not operate at their best when their efforts are not open to challenge by others makes one batty, I am proud to call myself batty, too, and to vote, as I shall, for the Bill's Second Reading.

Mr. David Marshall: I wish to oppose the Bill. First, let me declare an interest as a sponsored member of the Transport and General Workers Union and a former bus worker. In addition, in my constituency there are two bus garages — Parkhead, which is one of the largest in Strathclyde PTE, and Baillieston, which is a Scottish Bus Group garage. Many hundreds of my constituents depend upon the bus industry for their livelihood. Thousands more depend upon public transport, as many of them do not possess or have access to a car. In parts of Glasgow, 70 to 80 per cent. of the population have no alternative to public transport if they want to go anywhere.
In my constituency, adult unemployment is over 30 per cent. and goodness only knows what the youth unemployment level is. Good, reliable, cheap public transport is an essential if people are to have a reasonable quality of life.
In his opening remarks the Secretary of State referred to my prediction of five years ago. What the then Secretary of State failed to do, the present Secretary of State seems determined to do with this Bill — to destroy public transport in Britain. My prediction may not be so far out. Only time will tell.
There is a simple reason for the decline in the use of public transport. People who have the use of a car prefer to use it and the vast majority will continue to do so, even if public transport is free. The car is the most popular form of transport and there is nothing wrong in that.
However, it is those who do not have access to a car whom we want to attract on to public transport, and we want them to make as many journeys as possible. It is the Government's economic policies which have created over 4 million unemployed, which has had the greatest effect on public transport, in the past five years. Unemployed people do not travel to work and have a greatly reduced need to travel for leisure, recreation, culture, shopping, visiting, and so on. That, in turn, affects the viability of many routes and services as well as the entire community. Get people back to work and we shall see great increases in the demand for public transport.
Let me pay tribute to the hundreds of thousands of working men and women who operate public transport services of all kinds in this country—services which we all take for granted. Transport workers have a difficult job, working all sorts of hours in all sorts of conditions, such as the weather that we are presently experiencing, yet they seldom fail to operate the services. They face the continual stress and responsibility of driving in all kinds of conditions, serving the public, and, unfortunately, the ever-present threat of assault and abuse. In addition, most of them have to work overtime, including rest days, to earn a reasonable living. I should love to see the Secretary of State out at 4 am in freezing conditions or driving a bus until midnight on a Saturday and Sunday. It might even change his attitude to transport workers.
What is the Secretary of State's attitude to transport workers? What thanks are bus workers to get for providing over 50 years of relative stability in their industry? No thanks whatever. In fact, a kick in the teeth is much more likely. Clause 76 enables the Secretary of State to make regulations for compensating persons for loss of employment or loss or diminution of emoluments—in other words, redundancy or less pay and poorer conditions.
Privatisation will be a disaster for the bus industry. Proper co-ordination will become impossible, putting an end to integrated timetables, through ticketing, through services and nationwide marketing. Cross-subsidy will be impossible, so many services will be reduced or withdrawn. Over 50,000 bus workers will be transferred to the private sector without any choice as to who their new employers will be. Jobs will be lost, union agreements torn up, pension schemes, sick pay and holiday agreements put at risk, and hard-won terms and conditions of service thrown out of the window.
The sad thing is that all that is unnecessary. The National Bus Company is making a profit, has repaid Government loans and improved productivity. Its crime is that it is succeeding as a publicly owned company and that is unacceptable to the Secretary of State.
It is most unlikely that new small operators will purchase new buses. It is much more likely that they will buy reject old vehicles from the NBC or PTEs. However, if they do buy new vehicles they are more likely to be imported than is presently the case. Has the Secretary of State estimated the effects of the Bill on companies such as Leyland and Alexander's Coach Builders? How many jobs will be lost in that respect as a result of the Bill?
I wish to deal with some Scottish aspects of the Bill, in particular, the Scottish Bus Group and British Rail services within Strathclyde region and Strathclyde PTE. The Secretary of State has said that he has no plans to privatise the Scottish Bus Group at present. Everyone believes that it is only a matter of time before it will be privatised. Why does he not come clean and tell us his true intentions now? It is not in the best interests of the company, the work force or the passengers not to know how long the company will be allowed to operate as it is at present.
The Strathclyde rail review is the result of long negotiations between British Rail and Strathclyde region. The Bill could mean the disintegration of the review. That will lead to an adverse effect on British Rail's income so that it will have to find more and more ways of keeping costs down. Therefore, there will be more and more service reductions or withdrawals, especially in the evening. It will mean taking a new look at many services such as the electrification and investments proposed for the Glasgow to Ayrshire corridor. If the main routes between Ayr and Glasgow are to be ripped off by cowboy operators, what chance is there of improvement in real services? What is the point of British Rail spending millions of pounds if cowboy bus operators are to cream off all the profits?
There is also the unanswerable environmental aspect of the proposed electrification schemes. In addition, the A77 Glasgow to Ayr road is one of the most dangerous in Scotland and the last thing that we need are convoys of clapped out buses on that road. What will the Secretary of State for Scotland tell his constituents if the Ayr electrification scheme does not go ahead because of the Bill? It is most disappointing that he is not present in the House when matters affecting Scotland are being discussed.
Transport operators work from 4 am to midnight, not from 8 am to 6 pm as would be the case for many new operators. The effect on integration tickets, transcards, interlink services and feederlink services will be detrimental in Strathclyde.
If deregulation is the answer to all the transport problems, why is London being left out of the Bill? I am not arguing for it to be included, but is that not rather inconsistent? Or does not the Secretary of State believe in his own proposals? However, he is content to break up Strathclyde's transport system, and could conceivably cause 1,000 jobs to be lost in that area.
Strathclyde contains many uneconomic urban bus routes which will not attract the proposed subsidy for rural services. In October I asked the PTE for information on the costs of all its services in Glasgow. Let me quote from the director's reply:
it is broadly fair to say that on the last available figures out of 67 services only 4 more than recovered their total costs, 4 were broadly break even while the balance required support. Of this balance of 59, 11 were of such a social nature that their revenue earned did not recover 50 per cent. of their costs.
What will happen to those services?
Strathclyde has the lowest level of bus support in conurbations throughout the United Kingdom. It is at the forefront of the development of microbuses in some of the largest housing schemes in Europe. Another new development is the swap body concept for rural transport. We also have the metroliner, new city buses and a door-to-door dial-a-bus service. Most important of all, it has the


first specifically designed double-deck vehicles capable of carrying disabled passengers and operating on regular day services.
Strathclyde has a comprehensive system of concessionary fares. It covers 5,000 square miles and serves half of Scotland's population. I can foresee that literally hundreds of new operators will emerge as a result of the Bill. It will not be possible to have a properly operated system of concessionary fares. The public are bound to suffer as a result. Many rail services and bus innovations are at the development stage and need protection from predators if they are to succeed. They need time to become established.
If London is to be excluded from the Bill because of special circumstances, an equally good case can be made out for Strathclyde. Why does not the Secretary of State exclude Strathclyde from the Bill for the time being to give it the same opportunities as London? Will he give the House an assurance that he will reconsider the position of Strathclyde?
There are three main objectives behind the Bill, none of them concerned with providing better services to the public. It seems to undermine trade union organisation and solidarity in the transport industry; to undermine local government even further and to cut public sector manpower and create further reductions in public expenditure at the expense of those less fortunate members of the community—the non-car-owner, the non-driver, the old and the young, the handicapped and the disabled, the unemployed and the poor.
I am grateful to Councillors Laing and Meldrum of Strathclyde region for providing me with a brief of the effects of the Bill on the disabled in Strathclyde. Presumably, the disabled face the same problems in other areas. Time allows me to quote only one paragraph, but I should be happy to let the Secretary of State have a copy of this three-page document. It says:
With the development of an uncoordinated system of public transport, with many different types of vehicle being used, it will be difficult for a disabled individual to plan a journey. For example, a blind person may not know whether he enters the bus from the rear or the front; a person with a locomotor impairment may not know whether he can get back from a journey if the bus changes from a low floor coach to a high floor coach. There is also the problem for the mentally handicapped, who may have been on courses to familiarise themselves with the bus system. After privatisation, they may have to use a more unfriendly service which creates a more hostile and stressful environment." I urge the House to oppose the Second Reading.

Mr. David Maclean: I warmly welcome the Bill, and I shall confine my remarks to part I, which is concerned with bus deregulation.
Critics of the Bill argue that it will bring a loss of services. All that we have heard from Opposition Members today is that we must protect the status quo. We have heard nothing about how to improve rural, indeed any, services. Not even did the Liberal spokesman, the hon. Member for the Isle of Wight (Mr. Ross)—who has done the usual Liberal thing of making a short speech and scuttling off—want more than the status quo.
What is the status quo that Opposition Members want to perpetuate? Patronage of buses and coaches in Britain has halved since 1953, down from 82 billion to 40 billion passenger kilometres per annum. The demand between

1972 and 1982 fell by 30 per cent., that at a time when the overall demand for transport was increasing rapidly. During that time, subsidies rose enormously. As the editor of one of the two excellent newspapers in my constituency, the Cumberland News, wrote—[Interruption.] He wrote a balanced editorial and he would object to Labour Members suggesting that he edits a Tory newspaper, considering that he is the vice-chairman of the Guild of Newspaper Editors and will be at the House of Commons tomorrow night to lobby us on the question of VAT; Opposition Members can tackle him then, if they wish. He wrote in a balanced editorial:
In fairness, the Government is facing reality. For even in these days when figures of money sound like telephone numbers, the increase in bus subsidy in 10 years, from £10 million to more than £50 million, is truly staggering—and it has not controlled fares.
I might add that it has not altered the decline in rural services, either.
Most criticism of the Bill has been about its effects on rural services. The hon. Member for Crewe and Nantwich (Mrs. Dunwoody) quoted the National Federation of Women's Institutes. Mrs. Anne Harrison, the chairman of that body, was quoted in my other excellent local newspaper, the Cumberland and Westmorland Herald, last week as saying:
We are concerned that this legislation sounds the death knell of the rural bus.
I respect the WI, but Mrs. Harrison's warning is 15 or 20 years too late. What rural bus is she speaking of? The newspaper reported her as saying:
Commercial operators will swarm like bees round a honeypot to the busy town routes, leaving rural ones with no bus services at all.
I have the largest constituency in England, 1,200 square miles, and what she fears has happened already; large chunks of my constituency have no services, and those with services have completely inadequate ones.
Are our critics arguing that we should freeze matters at their present levels? That seems to have been what Opposition Members have been arguing today. They have not spoken of how to halt the decline in rural and city services, just that we should leave things alone and keep the jobs for the boys. Any hon. Member who is arguing in favour of the present system of regulation is inevitably arguing in favour of a system which will gradually lead to the complete disappearance of all rural routes.
One must speak to people of a much older generation than that to which I belong to find someone who has seen buses in rural areas on Sundays. I hear Opposition Members talking about Sunday buses being affected by the Bill. We have not had Sunday buses for years. They have all gone.
Opposition Members complain that there might not be an integrated transport system enabling people to get home at night when they come off the train at perhaps 10 o'clock or leave the cinema. In most parts of rural Cumbria we have not had late night buses for years. The present system has given us precious few rural routes, and those that exist charge exorbitant fares.
I respect Opposition Members having to toe the line of the Transport and General Workers Union. It is legitimate for them to defend the rights of their members, but they must not say that they are concerned with rural services and the decline in bus services generally and go on to make bogus arguments about safety, concessionary fares and so on.
When the trade unions and others say that we must not interfere with the present system, they mean that scores of villages in my constituency should be condemned to the present system of not having any buses, or those that have buses should continue to have inadequate services. I have in mind the beautiful little village of Kirkoswald, which even now has only one bus a day. However, that village is well off compared with the neighbouring village of Dufton, which has only one bus each Tuesday and one each Saturday. But even that is better than the village of Roadhead, which has only one bus each Wednesday, like the village of Newbiggin, which has one each Tuesday. Those who live in the village of Dundraw must walk a mile in the hope of getting a bus passing on the main road.

Mr. Peter Pike: rose—

Mr. Maclean: I will not give way because I do not want to detain the House for more than a few minutes longer.
If Opposition Members are boasting that we are having the marvellous achievement of 50 years of regulation, since the 1930s, and that what we have is what state control and a fully integrated system has achieved, that is a hollow boast in my constituency—[Interruption.] I think I hear Opposition Members shouting that I shall not have my constituency for long. I assure them that my majority would have been 10 times larger had the Labour candidate not disappeared through the floor, so to speak, having lost his deposit.
We see the result of 50 years of regulation. Opposition Members should be ashamed of themselves for wanting to retain that. If the pattern of the last 10 years is repeated, most of the hamlets and villages in my constituency will not have any buses by 1995, even with massive subsidies, and the subsidy support over the years has been absolutely enormous.
In Cumbria, revenue support in 1974 was £115,000. In 1984 it was £2·345 million, an increase of 2,000 per cent. Even I do not condemn that per se. I would support an increase in subsidy of that extent, if it had worked and increased the number of passengers. However, in the same period the number of passengers using buses dropped by 23 per cent., from 88 million to 66 million, in the Ribble catchment area, which includes Cumbria.
Does anybody seriously suggest that that trend can be reversed? The answer is no. We have seen on the graphs how the number of people using the buses has declined: the line on the graph goes straight down. The line on the graph showing the number of passenger miles travelled also goes straight down. But the line showing the amount of subsidy support on an expotential curve goes straight upwards. Unless we take radical action now, we shall see the escalation of subsidies, fewer passengers and fewer jobs for bus drivers.
Cumbria has a population of 480,000, 26,000 of whom travel by bus to work. If the pattern from 1974 to 1984 was repeated over the next 10 years, by 1994 the bus subsidy for Cumbria would be £50 million. In other words, the subsidy given to each person travelling to work by bus would be £2,000 per person per annum. On that basis, it would be cheaper to buy each person a Mini Metro because over 10 years we should have given them £10,000 each to travel to work by bus.
Allowing for everybody else using buses, including those who travel socially, the subsidy would be £460 per

person per annum. At that rate is would be cheaper to buy each of them one of Clive Sinclair's C5 trikes. Indeed, we could buy each bus traveller a new trike each year. It would be cheaper to do that than to pay the bus subsidy.

Mr. Allan Rogers: rose—

Mr. Maclean: The hon. Gentleman should contain himself.
Another criticism of the Bill comes from vested interest groups. The Transport and General Workers Union claimed that safety would suffer when cowboy operators took to the roads. My constituents and I strongly resent that criticism of so-called cowboy operators. Private operators are already operating buses on school runs. If Opposition Members are calling them cowboys, perhaps they would care to come to my constituency, name names and allow the council to take action against the so-called dangerous cowboy operators. Critics of the Bill also refer to jobs. Of course jobs will be affected. But for how long do Opposition Members imagine that we can guarantee the job of every worker in the National Bus Company while the number of passengers that it carries continues to fall rapidly? We can only guarantee those jobs, and the jobs of others working in public transport, by persuading more customers to use the services.
The level of rural services has been declining and will continue to decline. The Government's plans for deregulation represent the last hope of safeguarding and improving our rural services. The decline has gone on for far too long. I will do my utmost to make sure that rural services are maintained and improved. The best way of doing that is to vote for the Bill, as I shall do. I urge all my hon. Friends to vote for it too.

Mr. Terry Patchett: My constituency has a strong interest in seeing the Bill defeated. I would have preferred the debate to take place on some other day as, ironically, I have had to cancel a driving test in order to speak in it. However, in Barnsley, East, being unable to drive is no great inconvenience, thanks to the cheap, efficient service provided by the south Yorkshire transport executive. The financing of that service has been made an issue by the Tories in many local elections, and they have been rebuffed by the vast majority of the local electors.
Three main issues affect my constituency. First, by choosing to put the Bill through, the Government are ignoring the will of the people. The electors of Barnsley, East have spelt out clearly their support for the present system. My constituents are aware of the dangers in a Bill that makes concessions to get-rich-quick cowboys and hives off the lucrative routes without any compassion for those using the less profitable routes. My constituents also know about the subsidies required to maintain services over all the routes, and in elections they have given those subsidies overwhelming support. My constituents are also aware of the benefits to the less well off that are obtained through the cheap fares policy of the south Yorkshire transport executive.
It is big businesses and the better off who scream for tax cuts and rate cuts, and it is they who are listened to by this uncaring and cynical Government whose policies in every field ensure that the rich become richer and the poor poorer. These are strange days for democracy, when the Government overrule the wishes of the majority of the people.
The second issue is the service itself. We have sensible fares that people can afford, free travel for pensioners, and real services in rural areas where, as the Government know, no private company would dream of providing them. Will the Minister explain how an out-patient who regularly has to attend hospital in town for treatment, but cannot afford a taxi, is to get to the hospital if the rural bus service is disbanded? Will the ever-increasing costs be borne by the county's ambulance services while the Secretary of State for Health and Social Security is gleefully cutting hospital services?
The south Yorkshire transport executive has special buses to enable the wheelchair-bound so get into town. Do the Government really believe that a private company will provide such a caring service?
Thirdly, there is the question of jobs. There are two main bus depots, one in Shafton and one in Wombwell. The depots employ several hundred people, whose jobs will be put at risk by the Bill. That will be another wound to a community in an area where the Government and the coal board are seeking to destroy the traditional mining jobs and where a disastrously high rate of unemployment is rising still higher. There will be an effect on jobs in the town centre as well, because of the infrequency of services and the higher fares that will be extracted for the benefit of private profit.
I am sure that other right hon. and hon. Members will tell us more about the issues in the Bill and the effect that it will have on the quality of their constituents' lives. I can only hope that the House will stop selling out to the greedy and start caring for the needy, by voting against the Bill.

Mr. Conal Gregory: Buses are a vital form of transport. Many people depend upon a bus service, as four households out of every 10 lack the use of a car, and yet the story of the bus service has been one of decline. Bus fares have increased by 30 per cent. more than either motoring costs or the cost of living, while, at the same time, services have diminished by some 15 per cent. Because there are fewer services and higher fares, fewer people take the bus. That vicious cycle can and should be reversed. The Opposition have attacked the spirit of competition. They will not squarely face the challenge of public bus transport provision. The Government will not shirk that responsibility. I support the principles enshrined in the Bill.
In two respects, the Government have the success of deregulation on their side. The long-distance coaches, attacked by Labour, have been set free, and that has resulted in some 700 applications for new services. That fact has been referred to only briefly by my hon. Friends and not at all by the Opposition.
Secondly, local bus deregulation has been shown to have worked in the trial areas of Norfolk, Exeter, Hereford and Worcester. The present system is not good for the bus user or the taxpayer. The Opposition say nothing about the limits on resources. The subsidy is hidden, for no one can see how much financial help is given to any specific route. The subsidy jumped from £10 million in 1972 to more than £500 million in 1982. Surely it is far better that we should see where the taxpayers' money is going. The subsidy should be visible and should go to needy services. Those services should not be hidden through inefficiency.
The present system stifles competition. The need for each local bus route to be licensed dates from 1930—the year of birth of the hon. Member for Crewe and Nantwich (Mrs. Dunwoody). After 55 years, the hon. Lady should recognise that it is necessary to move with the times. The title of the popular song of that year seems appropriate. The hon. Lady may recall it — "Time on my hands". That is exactly what the hon. Lady will have, as she waits for service under the present system.
The Opposition have not made one constructive suggestion for reversing the present decline. They are devoid of ideas. They will shore up inefficient, loss-making, overmanned monopolies rather than allow competition. Route licensing acts like a straightjacket. The present mini-monopolies stifle initiative. In York, for instance, the West Yorkshire Road Car Company tried —though it failed—to block a new service for tourists wishing to visit that fine historic city. The present operators have an air of self-satisfaction. They try to prevent the extension of services. I want more routes, better servicing and better safety standards. Over one fifth of buses fail their inspection stage, and that shows that the latter is essential. The Bill should make all those aims possible.
Hon. Members should consider the hidden subsidy on their own local services. How many York electors and York bus users realise that the present restricted service is subsidised by the taxpayer? How many realise that the subsidy has more than doubled from £162,000 in 1983–84 to £361,000 in 1984–85? Those figures do not take account of the £320,000 for old-age pensioner concessions. How much better it would be to offer concessionary fares to all operators. The Opposition do not mention that. That would help senior citizens and the disabled.
We need more flexibility in public transport. York has a park-and-ride scheme— a Socialist sop to a council that will not provide adequate car parking or encourage more effective modes. Private taxis and minibuses would have cost York ratepayers less than the council's bus undertaking.
There is a major area of bus policy that is not recognised in the Bill—a duty to ensure public bus mobility for the disabled. I hope that my hon. Friend the Minister will take this matter on board. When county councils issue tender documents, they should ask what provision bus operators have made for the disabled through improvements in vehicle design, in the provision of routes and in staff training. When a person gets on a bus, he is often confronted immediately by a high step or a lack of handrails. The layout of the bus might be unfamiliar and a blind or partially sighted person might not know how the seats are arranged. There should be greater use of the system in Coventry where tactile symbols on the bus entrance indicate the type of layout that passengers can expect inside.
We should encourage the low step to be found on some buses and training to assist the handicapped. The special funds that the Bill envisages will, after enactment, enable such steps to be taken to make life as normal as possible for the disabled. A switch to different varieties of transport should not be allowed to be a step backwards to older and less appropriate vehicles for the disabled. Present design improvements should be pursued, such as, from the point of view of visually handicapped people, the use of clear contrasting colours to help passengers find their way around bus layouts and good lighting and bells that can be


found without unnecessary difficulty. There should be a duty on operators to consider the needs of the disabled in bus design and route provision.
The provision for shared taxis in the Bill is good news for the disabled. It is another area in which concessionary fares will apply. Staff attitudes can be trained. Hon. Members should imagine the plight of a blind person waiting at a bus stop in an unfamiliar area. A bus sails past because it is a request stop and the blind person does not know. Things might be different if the driver is trained to stop at the sight of a waiting passenger with a white stick and if a notice with tactile symbols is posted on the stop.
Local authorities are responsible for bus stops and the commission that accrues from advertising. They should use special grants that are available to assist the disabled through aids such as the talking bus stops in Western-super-Mare which tell the time and the estimated arrival time of the next bus and announce its approach.
The hon. Member for Crewe and Nantwich said that no experienced operators support these proposals. She shows a complete lack of knowledge of the industry or no care for public transport by making such a statement. The hon. Lady prefers to talk to the hon. Member for Wigan (Mr. Stott) than to hear the facts, but I shall nevertheless quote no less an authority than Mr. Stuart Appleby, the president of the Bus and Coach Council. He says:
People have been dictated to far too long. The quality of service has been dictated by the operator.
In response to comments by the Transport and General Workers Union, he said:
I understand their concern for rural transport but I do not think that they need worry. The services they were talking about will continue operating.
If the Opposition prefer the objective view of bus users, I shall quote the Welsh Consumer Council:
The present public transport system cannot continue as it is very much longer … A new way forward is needed. The Government's proposals provide a framework within which we believe a new and better transport system can be built".
We should reverse the system that has produced declining services and increasing blanket subsidies. The machinery of state regulations of more than half a century ago is more than creaking. The time has come to ensure a proper service at a reasonable cost. That means competition with the safety valve for truly uneconomic but socially necessary routes. I welcome the Bill and ask all right hon. and hon. Members who truely care about the provision of public transport to support its Second Reading.

Mr. Sydney Bidwell: I am a senior member of the Select Committee on Transport and recently went to Worcester and Hereford. The House has heard about Worcester and Hereford but nobody has yet mentioned the woman leader of the Tory minority on Hereford city council, which opposes the Bill because of the way that city has suffered. I understand that the council's planning officer has conveyed that view to hon. Members in preparation for today's debate. Hereford has had a ghastly experience, but that is not to say that lessons have not been learned or that the strengthening of the licensing system would not prevent some of the excesses that have been experienced in the Worcester and Hereford trial.
The hon. Member for York (Mr. Gregory) said that he had heard no constructive suggestions from the Opposition. He will get positive comments from the Select

Committee report. We shall try to produce an objective report—that is why we have tabled the amendment. Every right-minded hon. Member, including Conservative Members, should consider the cruel logic of the amendment. It would enable the House to have the benefit of the enormous information collected by the Select Committee. The study has been exhaustive.
The hon. Member for Wellingborough (Mr. Fry) made an outstanding speech. The House should learn from what he said as nobody doubts his great experience in these matters, especially in regard to buses because of his association with the National Bus Company. He mentioned how the small operator can easily be put out of business. The man who runs the highly acclaimed Primrose service in Hereford and Worcester says it is not sufficiently profitable and that he is thinking of pulling out. He told me that wear and tear of vehicles is far greater in the stage carriage business than on long runs. If it were possible the operator would prefer to confine his business to holiday runs to the south of France. All sorts of skullduggery has arisen from that competition. The Midland Red is running services that it did not provide previously to drive the innovative service off the road. There has been a scramble for the bus stop in the heart of town, and because the buses cannot get on the roadway, they have been using the pathway.
Hereford city centre is extremely attractive, and I was glad to be there. We talked to members of the city council. The woman leader of the Labour minority asked pertinently why the White Paper did not apply to London. As a Londoner I could tell her that all hell would be let loose under the Bill's crude proposals. I cannot imagine what members of my union, the Transport and General Workers Union who are London busmen, would do if there was complete privatisation of buses of all sorts, sizes and qualities.
Members of the Select Committee talked to the traffic commissioner there. Although he did not disagree with the Bill as a whole, he said that he was afraid that as takings decrease as a result of competition with bigger operators —there will be bigger operators if the NBC is privatised — and profits decrease, safety will suffer first. Regulations about the interior of buses, such as those forbidding loose carpets and loose panelling will be affected. The test on public service vehicles that carry passengers is more severe than that on commercial vehicles. Some commercial operators may think that they can switch to buses on the cheap, but they cannot as they will discover in time. The traffic commissioner admitted that the rigidity of the safety standards, which we all want to see, would go.
In Committee the excessive nature of the Bill will become clear. Most of it is false arid doctrine, not wet doctrine, which appears from time to time from hon. Members on the Benches below the Gangway. Those hon. Members will take over the Tory party before it faces the next general election.
The proposals in the Bill are mad. I hope that the Bill is trimmed down. We could ensure that, if the House had the benefit tonight of the Select Committee's massive evidence. No one with practical experience of transport seems to like the Bill. There is a conflicting attitude about the effects that it will have on rural services. Privateers will not run services in rural areas merely for the love of it, merely to break even, nor if it provides a small profit, but only if it provides a big profit. Those are the only


conditions acceptable to them. When they discover other forms of road vehicle operation they will suddenly pull out altogether and leave people stranded.
The hon. Member for Derbyshire, West (Mr. Parris) talked lovingly of having met a woman who said that the experimental area had been a great success, and that buses were more frequent than previously. But in the end bigger operators will drive out smaller operators. They could even run buses free of charge for a period. Predatory pricing would go on under privatisation and the struggle of the public service operator. That is going on at present, and will continue into the future unless there is a one-owner-driver vehicle.
There will be problems such as moonlighting. Drivers will not receive adequate medical attention. At present taxi drivers in London and elsewhere must undergo a stringent medical test. There will not be the present level of supervision, or the same wages standards and conditions, including pension arrangements. That is not true competition.
The taxi trade does not like the Bill. Taxi drivers are flexible. Taxi drivers outside London and many in London, although they have mixed feelings, think that it is possible to have taxi sharing, but do not believe that it can be done under the present system of hailing a taxi at the roadside. They believe that filling a taxi must be done by prior arrangement, which can be done at present. They do not mind an increase in those arrangements. One of my hon. Friends mentioned the position of women out at night, many of whom wish to take taxis because they feel safer doing so. I do not know why the Bill includes a taxi provision. For a long time taxi drivers have wanted special regulations that would properly assess their costs. It is the only transport service that is not relieved of VAT, which is one reason why taxi fares tend to be high.
I cannot discuss every facet of the Bill tonight, and I am aware of the promise to be reasonably short. However, I should say that the MVA Consultancy document on Plymouth estimates that under the Bill's crude arrangements, the rates in that area—which is a Tory one—would have to increase by about 22 per cent.
The Association of District Councils has got it right, and it represents authorities of all political colours. I hope that the Standing Committee will have available to it the considerable evidence heard by the Select Committee. The House should have had that evidence before this debate. I hope that many hon. Members will accept the logic of the work of Select Committee. Why do we have them? If they are not to obtain agreement among the parties on matters of common sense, they mean nothing. The Leader of the House said that he was proud of the work of the Select Committees. The work of the Select Committee on Transport will have been snubbed unless the House carries the amendment of the hon. Member for Wellingborough (Mr. Fry). If it does, the Bill will have to stand still until we receive the Select Committee's report in about a week or two.

Mr. Michael Knowles: I know that my hon. Friend the Member for Nottingham, South (Mr. Brandon-Bravo) would have wished to be here this evening if he were not abroad on parliamentary business, because we have discussed the effects of the Bill on

Nottingham on various occasions. What has come through from the debate is that we have not heard one solid counter proposal from the Opposition. There are always a hundred reasons for doing nothing. What has come through is their love for the nanny state and of bureaucratic control for its own sake. The present system is a typical example of the 1930 ideology of rationalisation. It did not work well before the war, and it led to a 30-year decline in the bus industry. Everyone knows that it has continued for 30 years, but when my right hon. Friend the Secretary of State proposes to do something about it, the immediate reaction is that his proposals are wrong and radical. But something must be done if the industry is not to die.
We heard precisely the same arguments a few years ago about the inter-city bus routes, and we need only consider the benefits that competition has brought there to see what can be within our grasp.
The inflexibility of the present controlled system means that when problems arise, we look only for further controls. As politicians and bureaucrats control the system, they have a vested interest in further controls. Nottingham's history is an example of that. Apart from introducing the bus lanes which beset every large city as a means of squeezing cars off the roads and forcing people into buses, before 1976 the Labour-controlled Nottingham authority introduced a mad scheme called the "zone and collar scheme". The idea was that if the authority could reduce the access points into the city and control them with traffic lights, which were always at red, it would force everyone to get out of their cars and use the buses. Of course, it did not work and was rejected by the local electorate, but it cost £800,000. But it is not untypical of other lunatic schemes introduced from time to time by transport authorities.
The council also planned to increase the bus fleet from 360 to 600 buses. Those buses were not needed, but the council was slavishly devoted to the idea of publicly owned transport. Fortunately, the Labour party lost control there in 1976, so its plan was held up. The bus fleet was reduced to 360 buses, which could more than cope with the demand.
Despite that experience, Nottingham bus services are now mostly sensibly run. Therefore, taken in isolation, one could probably make the case that it did not need the Bill. It is a pity that Nottingham did not volunteer to be a trial area, because it would have been a better trial area than some of the others. It has a catchment area of about half a million people. Nottingham has the largest municipal bus undertaking with 360 buses, the largest private bus operator with 264 buses, one of the larger units of the National Bus Company in Trent and a medium sized private operator in south Nottinghamshire, which would have been a better system for a trial. When it comes to open competition, those four major operators would be able to cope with any small additional operators. Of course, others would come in round the fringes, but those operators should maintain a successful network, almost certainly at lower fares than we have now.
I suspect that the biggest effect could be on taxis. Although people say that this will grow slowly, I suspect that there will be a very quick development of the taxi system. It will have a dramatic effect. We have to accept that this system of control has failed. Siren voices always proclaim that the end of controls, rationing and


bureaucracy is dangerous and precipitate. They are right. Freedom is dangerous to a bureaucratic state. That is why I shall support the Government.

Mr. Roger Stott: My right hon. Friend the Member for Mansfield (Mr. Concannon) indicated in his speech that he would volunteer for the Standing Committee. I have to tell my right hon. Friend that we have an embarrassment of riches. My hon. Friends are queueing up to be members of the Standing Committee. It shows the importance we attach to this measure.
I should like to congratulate the hon. Member for Wellingborough (Mr. Fry) upon his excellent speech. He gave the reasons that underlie his amendment. We should not be debating the Bill until the Select Committee has reported. His speech was delivered in a true House of Commons manner. It compared well with the lamentable performance of his hon. Friend the Member for Derbyshire, West (Mr. Parris) who used the most fatuous example of grocer's shop economics that I have ever heard.
During the debate on the Local Government Bill on 4 December 1984 the right hon. Member for Old Bexley and Sidcup (Mr. Heath) described the contribution of the Secretary of State for Transport as
a pathetic image of a speech." — [Official Report, 4 December 1984; Vol. 69, c. 190.]
The speech made this afternoon by the Secretary of State for Transport was, if anything, even worse than that. He was totally unconvincing and unpersuasive. When the Bill reaches the Standing Committee we shall make sure that he is made very well aware of our view.
I am not complacent, nor is my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody). Public transport is suffering. There has been a decline in public transport. There has been a decline in the provision of public transport in our rural areas. That decline began in 1979 when this Government came to power. Since 1979 there has been an acceleration in the decline of our transport system. An increasing number of people find themselves condemned to virtual isolation. That has been said by many hon. Members during this debate. In particular, women, children, the elderly, the low-paid and the unemployed who depend upon public transport to get to their jobs or to see their families and friends are being denied that essential service.
Where it is provided properly, that service is, in my view, one of the most emancipating elements in the lives of ordinary people. However, those services have declined as a consequence of the transport policies of this Government since 1979. Local authorities, in particular Labour-controlled authorities, have been subjected to ever tighter squeezes on expenditure and public transport has suffered as a direct consequence. The transport supplementary grant has been reduced not only this year but by 23 per cent. since this Government came to office. Across the country we see what has happened to public transport. The National Bus Company ran 80 million fewer miles in 1983 than it did in 1979 when this Government came to office. There has been a positive decline in public transport since this Government came to power. When democratically elected Labour councils have tried to support public transport, the Government have

tried to stop them by introducing cuts in grant and attempting to impose spending limits. This has recently been reinforced by the rate-capping legislation.
Not content with this catalogue of disaster, the Secretary of State is now introducing his Bill to deregulate and privatise Britain's bus industry. He bases this legislation on his own theoretical experience and on a small and inconclusive experiment in Hereford and Worcester. We have heard about the Hereford and Worcester experiment from all sides of the House, and I have taken careful note of what people have told me about their experience of that scheme. As time is short, I cannot pay full attention to all the matters that have been raised in the debate, but I advise the hon. Member for Hereford (Mr. Shepherd) to read the speech of Lord Teviot, a former busman, who, in the other place, described his experiences when he visited Hereford and Worcester. He concluded:
The city council regard the trial area as a disaster".—[Official Report, House of Lords, 25 October 1984; Vol. 456, c. 307.]

Mr. Colin Shepherd: rose—

Mr. Stott: I cannot give way because I have a lot to say.
The Hereford and Worcester trial has been a total disaster. It is the wrong premise upon which to deregulate stage carriage bus services, to break up the PTEs, to break down the municipal operators into smaller units, to prepare local authority bus services for private ownership and to prevent direct subsidy for network services.
The White Paper which preceded the Bill shows that the proposals are based on the assumption that deregulation will bring new operators to the industry, lower costs, reduce fares and provide scope for new services. A thorough examination of the Government's proposals, and the evidence claimed to support them, shows that they are based on a crude economic theory of free market forces. That distorts the cost comparisons between private and public sector operations, and between the PTEs and the National Bus Company. There is no logical reason on the evidence available to support the Government's assertion that subsidy leaks into higher operational costs or that the industry does not benefit from economies of scale.
The evidence quoted and experiences in the trial area and from abroad, are highly selective, incorrect and will not stand the test of scrutiny. Clauses 81 and 84 oblige local authorities that wish to subsidise bus services to go into open competitive tendering. Those proposals are impracticable in a totally unregulated framework of operation. If the conditions of the contracted services are not protected from competition there is no way in which the operator who enters into a contract can know how long that contract will remain viable.

Mrs. Elaine Kellett-Bowman: rose—

Mr. Stott: No, I shall not give way. We have heard that argument from the hon. Member for Wellingborough and if Conservative Members are not prepared to believe me, they should at least give him the benefit of the doubt.
These proposals are really about reducing revenue support to meet public expenditure targets. A combination of the elimination of cross-subsidy, the cutting of revenue support and the other measures that have been put before us tonight will not work. They will not provide the services that the Secretary of State requires, but will do extremly severe damage to our bus industry. If hon. Members on the Government Benches refuse to believe what I say,


perhaps I could refer them to the evidence taken by the Select Committee. The hon. Member for Lancaster (Mrs. Kellett-Bowman) should not shake her head. I am referring to the evidence given by the National Bus Company. My hon. Friend the Member for Sunderland, South (Mr. Bagier) was questioning two gentleman from the National Bus Company, and I would not impugn their integrity, even if the hon. Member for Hereford does. My hon. Friend asked them about the reduction in revenue support. Mr. Beetham answered:
It would almost certainly lead to a very severe reduction in the level of revenue-supported services, which may be provided by operators.
My hon. Friend then asked:
You mean increased fares or less services?
He replied:
Both. How far a county could, from its own resources, make up that reduction in central government funding is another aspect of the situation, but there the county might face difficulties in other aspects, like rate capping which would affect that. I think there would be grave difficulties.
Mr. Brook, the chairman of the National Bus Company, just appointed by the Secretary of State, came into the argument at that point:
I would be loath to see increased fares as a solution to this problem, because the fares are at levels already which are hardly bearable. It would require very substantial increases in fares and we would encounter great passenger resistance. My option would be to go for reduced services.
That is what the chairman of the National Bus Company said about the provisions of the Bill; those are not my words but his.
So far no one has referred to section 20 of the Transport Act 1968, which gives the passenger transport executives the right to pay to keep local railway lines open. This is a very important issue, particularly in Greater Manchester and in Strathclyde. No one has referred in the debate to the problems that are likely to occur if the Bill goes through as drafted. The activities of registered operators will clearly have implications for local rail services, where there is irect competition between the two. Registered operators may well draw a proportion of passengers from the local rail network with the effect of undermining further the financial viability of individual lines. Faced with these difficulties and a declining availability of revenue support, the authority is likely to be forced to withdraw support, with closure of the lines as the most likely outcome. This could effectively prejudice major investment proposals designed to improve the public transport infrastructure. There is no doubt that the proposals in Greater Manchester for a system of light rapid transit could be a casualty of this process.
Putting aside the practical operational implications of deregulation, there will be major problems with the forecasting of demand for revenue and concessionary support. In advance of deregulation the authority will simply not know what its revenue support requirements will amount to. Even when this is known, the activities of registered operators are likely to produce an unstable pattern of service for a number of years. I have already mentioned this. Concessionary support raises substantial difficulties of its own, not least the bureaucracy that is likely to be involved in preserving a system of permits and passes for those entitled to benefit. Again, forecasting of the demand for support is awkward in the absence of firm knowledge of who will participate in any scheme.
This is a highly complex area but it is important to put it on the record now. The proposed arrangements for concessionary travel within the general rate support grant structure require attention. At the moment children's travel is deemed to be financed from general rate support. There will have to be adjustments between the grant-related expenditure assessment for revenue support and the GREA for concessionary support.
For 1984–85, the Greater Manchester passenger transport executive estimated that its revenue support is £49·2 million. Of this total, at least £15 million, on the basis of revenue forgone by the executive, is attributable to children. Bearing in mind that much of this travel takes place during the peak times when costs are at their highest, the estimate is probably an understatement of the true cost. To put this issue in context, the current GREA for elderly concessionary travel in Greater Manchester is about £10 million, but the cost of providing that travel is £22 million. I suspect that other PTEs have similar figures.
If we are getting locked into highly complicated calculations about rent support grants, GREAs and concessionary fare travel, I suggest to the Secretary of State that this is such a crucial issue that we shall have to spend a great deal of time in Committee getting assurances that concessionary fares will not be undermined. The Labour party feels that if these provisions are passed as they are, there will be severe damage to the concessionary fares in the PTE areas.
In totality, the proposals remove from passenger transport the long-held status of a strategic industry with integrated networks such as Tyne and Wear. It is being relegated to a "use it or lose it" industry. If the current Government thinking is correct, the rest of the world is wrong. No other Government of any developed country are prepared to place the business of moving millions of people daily at the mercy and the inconsistency of the free market forces. The Secretary of State knows that and that is why he has excluded London from the Bill, and will not extend its provisions to London.
To placate some of his Back Benchers who have grave doubts about the Bill, the Secretary of State has said that the contents of the Bill when it has been passed will not be operational until December 1986, or perhaps early 1987. However, whether the Bill's provisions become operational sooner or later, these issues will become an election issue next year in the county council elections, and in the general election. People will have a clear choice. They can believe in a Secretary of State for Transport who continues to inhabit the higher astral planes of lunacy, and who will be solely responsible for the destruction of our bus services if these measures go through, or, on the other hand, they can take our alternative. The Labour party will be campaigning in those elections, putting our alternative strategy and our alternative transport policy. We shall tell the people that we shall restore local democratic control over their own affairs and that we shall preserve their bus services.
My hon. Friends the Members for Crewe and Nantwich and for West Bromwich, East (Mr. Snape) and I have been addressing meetings up and down the country since the Secretary of State first produced his White Paper on the buses. I tell him and the House that these proposals do not have a friend anywhere—

Mrs. Kellett-Bowman: Rubbish.

Mr. Stott: —apart from one or two sycophants on the Government Benches. The pity is that the municipal operators, the National Bus Company, the well-established private operators, the Taxi Drivers Association, the Bus and Coach Council, the National Federation of Women's Institutes, Transport 2000, Rural Voice, the Association of Metropolitan Authorities, the Association of District Councils and the general public —the customer, the people who matter—have shown their objections to the Secretary of State's proposals.
The Secretary of State has displayed his usual characteristic of imitating the dodo. If one were to walk through the deepest recesses of his mind, one would not even get one's feet wet. The right hon. Gentleman has contemptously dismissed the voices of experience and reason. Before we are through with him, he will wish that he had never been born.
I know of no political commentator who has described the tenure of office so far of the Secretary of State as a howling success. The policies that the right hon. Gentleman has tried to pursue of late have hardly enhanced his reputation. In fact, they have merely confirmed what most of us believe—that the Secretary of State not only walks but thinks in concrete. As a consequence, he has shown a monumental display of incompetence in dealing with almost every aspect of policy he has so far put before the House.
The Secretary of State for Transport is a paradox. He possesses characteristics that are not necessarily exclusive to him, of being, on the one hand, intellectually stupid and, on the other hand, artistically brilliant. I suggest that the right hon. Gentleman should do us all the favour of doing what he does best and leaving transport to other people. If he does not, I guarantee that he will receive not only in the House, but in the other place, the biggest mauling of his political career. I invite hon. Members to join me this evening in starting that process.

The Parliamentary Under-Secretary of State for Transport (Mr. David Mitchell): My hon. Friend the Member for Wellingborough (Mr. Fry) has asked for a delay of the Standing Committee sitting until the Select Committee reports. The Select Committee has also asked for time to publish its evidence. I gather that the Select Committee can do that by 21 February. The Government are prepared to delay setting up the Committee until Thursday 21 February. I hope that that concession will satisfy my hon. Friend.
On 28 November 1984 the Chairman of the Select Committee wrote to my right hon. Friend the Secretary of State and said that the Committee hoped to publish its report in early February.

Mr. Leadbitter: The hon. Gentleman is not providing a concession. The timetable which he has announced does not give hon. Members any time to study the Committee's report.

Mr. Mitchell: It certainly is a concession, because the Committee was due to sit on 19 February. There is, therefore, a delay. I think that it is likely that the Committee will be able to publish by then.
The Select Committee's Chairman expected to publish his report in early February. It is now near the middle of

February, and I am sure that the Select Committee will agree that the Government are in no way responsible for any delay that has occurred.

Mr. Oakes: The hon. Gentleman says that the evidence will be produced on 19 February. That is the day on which the Select Committee meets. Will the report be available to us on that day?

Mr. Mitchell: That is up to the Select Committee. It would not be right for me to speak for it.

Mr. Parris: As a member of the Select Committee —the hon. Member for Hartlepool (Mr. Leadbitter) and the right hon. Member for Halton (Mr. Oakes) are not —may I say that my hon. Friend's concession will be greatly appreciated by all members of the Select Committee on Transport. We are extremely grateful to him.

Mr. Mitchell: I am grateful to my hon. Friend for making that point.
The question of a Special Standing Committee is a matter for my right hon. Friend the Leader of the House. I understand that the procedure is generally applied to non-controversial Bills. I doubt that the House would consider that that applied in this case. I hope that, in the light of this concession, my hon. Friend the Member for Wellingborough will feel able not to press his motion. I certainly would not be able to advise my hon. Friends to support him were he to do so.
Throughout this debate there has been very clear recognition of the enormous importance of buses to a large number of our fellow citizens. The elderly particularly, students, the lower-paid going to and from work, women, especially those isolated by their husbands' taking the car —all of these are enormously dependent on the bus for getting around, and 39 per cent. of households have no regular access to a car. Therefore, the quality of life for many of our fellow citizens very much depends upon the success of this industry, but it is in a state of decline.
The hon. Member for Wigan (Mr. Stott) suggested that that decline started in 1979.

Mr. Stott: Accelerated.

Mr. Mitchell: I can tell him that it has been going on for 30 years. Thirty years ago 40 per cent. of all journeys were done by bus. It is now down to 8 per cent. and passenger mileage has come down by 50 per cent. in that period. Indeed, in the last 10 years, while fares have gone up 30 per cent. above the rate of inflation, there has been a 28 per cent. reduction in passenger journeys. So what we have here — and the House should realise this — is another sunset industry in the making if nothing is done to revitalise it.
My hon. Friend the Member for Hereford (Mr. Shepherd) was absolutely right when he said that no responsible Government could sit and do nothing while the situation continued to deteriorate. Subsidy has been tried as a solution. In 10 years it has gone from £10 million a year to no less than £522 million in revenue support. That has nothing to do with concessionary fares or other aspects. Nobody could claim that this huge increase has resulted in any significant improvement in the services provided to the public.

Mr. Richard Caborn: Can the hon. Gentleman rightly say that about south Yorkshire? For the last decade in every year there has been an increase


in the number of passengers carried, and by every objective test the operation has been shown to be the most cost-effective. Indeed, in 1982, when the Secretary of State's Department put into operation a survey, again it showed the most balanced approach to transport. We are now seeing over 350 million journeys each year for a population of 1·3 million in south Yorkshire. The operation has been shown by every objective test to be the most cost-effective.

Mr. Mitchell: The hon. Gentleman has his own views and quite clearly south Yorkshire is in many ways a law unto itself. He may think it is that good, but in south Yorkshire the costs per bus mile are among the highest of all PTEs in the country—over £2·07. They are 11 per cent. above those in the west midlands. The south Yorkshire PTE is alone in having more than 30 per cent. of its buses without one-man operation. In other words, it is not as efficient an operation as the hon. Gentleman is telling the House.
I could hardly recognise the Bill from some of the things which the hon. Member for Crewe and Nantwich (Mrs. Dunwoody) said about it. She suggested that 50,000 jobs would have to go. What she means is that 50,000 jobs will be transferred from the public to the private sector. So it is a half-truth, and a damaging one, which she is trying to peddle when she suggests that 50,000 jobs will go. She told the House that as a result of the White Paper the women's institutes were so fearful that a survey was conducted in Oxfordshire. I have to tell her that the survey in Oxfordshire predated the White Paper by a considerable time.
She says that in Hereford and Worcester the rural services were cut back as a result of the Government's trial area there. My hon. Friend the Member for Hereford (Mr. Shepherd), giving evidence to the House this evening, has already demonstrated that not only were they not cut, but they were extended by 2 per cent. That is a valuable improvement in the situation.
The Bill is not a charter for unscrupulous politicians to frighten old-age pensioners. I think, particularly, of the worries raised by my hon. Friend the Member for Lancaster (Mrs. Kellett-Bowman). Only last week I was in Birmingham, and heard of thousands of old-age pensioners who had been frightened into believing that the Bill would do away with concessionary fares. But the Bill is not concerned in any way with concessionary fares other than to ensure that they are available to more citizens through allowing any operator to participate in the scheme.

Mr. Leadbitter: Will the Minister give way?

Mr. Mitchell: My hon. Friend the Member for—

Mr. Leadbitter: rose—

Mr. Speaker: Order. The Minister is not giving way.

Mr. Leadbitter: Will the Minister give way?

Mr. Mitchell: I have already given way several times.
My hon. Friend the Member for Wellingborough asked a sophisticated and thoughtful question, as did the right hon. Member for Mansfield (Mr. Concannon). They asked whether it would be possible for concessionary fares to be provided without having to have tokens, through some system of bus passes and so on. I asked my hon. Friend the Member for Wellingborough what sort of numbers

caused him concern. He wanted to know how people could manage if there were four or five operators in the scheme. I should point out that in Birmingham there are 32 operators in the scheme, and at present they do not use tokens. I hope that that will be of some reassurance to him.
Several hon. Members, including my hon. Friends the Members for Swindon (Mr. Coombs) and for Wellingborough and the hon. Members for Hartlepool (Mr. Leadbitter) and for Isle of Wight (Mr. Ross) mentioned cross-subsidy. We tend to think about the beneficiaries of cross-subsidy and not to recognise that there are payers as well. Many constituents are being taken to the cleaners by the excess profits that are taken from the better routes. When the Bill is enacted, there will be lower fares and more services on the better used routes.
Thoughtful people will recognise that over-reliance on cross-subsidy has been a major factor in the industry's decline. For every 10 per cent. increase in fares, 3 per cent. of the passengers are lost. The industry is cross-subsidising to the detriment of its major potential customers on its better routes. That means that the blame for much of the industry's decline can be laid at the door of the system.

Mr. Leadbitter: rose—

Mr. Colin Shepherd: rose—

Mr. Mitchell: I give way to my hon. Friend.

Mr. Shepherd: Can my hon. Friend confirm that the ending of cross-subsidy will not lead to an increase in direct subsidies paid to operators of unprofitable routes at the expense of ratepayers?

Mr. Mitchell: I shall be happy to take the House through what will happen. First, a considerable degree of cross-subsidy will continue. But it will be commercial cross-subsidy and not the present form of cross-subsidy. That will go on because operators want to maintain their goodwill, to protect their brand image, to hold off competitors, to position vehicles and so on. Therefore, cross-subsidy will continue to provide the part of the network that is not viable. But any operator will admit that operators have nearly always got a large block of marginal routes. If nothing happened, those routes would drop off after three, four, five or 10 years, and areas might be left without any services if we allowed things to continue. On those marginal routes, once competition operates and the bus companies start to become more efficient, they will be able to operate those routes without making a loss. My hon. Friend the Member for Hereford knows very well that the Midland Red bus company when faced with competition improved its productivity by no less than 25 per cent. That kind of improvement turns a marginal route into a profitable one.
Then there will be new operators who will come in with minibuses and such like, often not town-based services going out to the country but minibuses starting in country villages and running services into the towns.

Mr. Steen: When my hon. Friend visited South Hams last weekend, did he get the impression at the public meeting that he addressed that the constituents of South Hams were excited by the prospect of minibuses going from the country into the market towns or that they were disenchanted at the prospect of the application of the Bill to their area?

Mr. Mitchell: When I visited South Hams, there was a great deal of complaint about villages like Princetown which have no bus services but now see the prospect of having such services.
Finally, there will be those routes which will not be economic on any basis. For them, the subsidy available to the local authorities will be appropriate, but by means of competitive tender. By using competitive tender, they will find that their money goes much further than it does at present. What now takes place is a bilateral deal between the county council and the largest operator and nobody knows whether there is value for money. When this was put to competitive tender in Hereford, 38 per cent. of the ratepayers' money was saved. When it was attempted in Norfolk, the National Bus Company wanted £500,000 for a block of routes. When it was put out to competitive tender, it cost not £500,000 but £150,000, which was a huge saving for the ratepayer.
There is, of course, the option in the hands of the county council not to save money but to extend the network. Hon. Members who are worrying about the rural areas will realise that county councils will have plenty of opportunity to extend and maintain the network, if that is the wish of the people in the area concerned.
In addition, we are providing for the rural areas a £20 million transitional grant and £1 million a year for innovation.

Mrs. Dunwoody: Oh!

Mr. Mitchell: The hon. Lady says "Oh", but that £20 million is in addition to the substantial sums included in the grant-related expenditure assessment to councils for expenditure on subsidising the services.
The attack of the hon. Member for Wigan (Mr. Stott) would have some strength in it if there were no room for improved efficiency as a result of competition. But I have already mentioned that Midland Red, faced with competition, saved 25 per cent. by improving productivity. The National Bus Company's operating costs averaged 25 per cent. below theose of the passenger transport executive. The Leeds study of four current National Bus Company agreements demonstrated that the crew operating costs varied from 23 per cent. to 77 per cent. above the level in other areas. These are within current systems operating in the National Bus Company—huge opportunities for improved efficiency.
The private sector costs are even lower than those of the National Bus Company, that is, some 20 per cent. below, as the Guildford and Cranleigh studies show. In travelling round the country and listening to local councillors and transport undertakings, I have noted the enormous variations in costs, in efficiency and in load factors—in Manchester only 13 persons per bus — with great differences in miles driven per year by drivers and in manpower per bus.

Mr. Bidwell: The Midland Red said that it had been stimulated and shaken up by the competition. Its managing director accepted that. It is entering into some arrangements with private operators. That is not competition, but an arrangement. This applies particularly to the company to which I referred in my speech with regard to the run-in periods, sharing routes and so on. That is what it is getting up to, and it is not competition. The Minister is not giving an accurate description of matters. It is the scale of privatisation to which they are opposed.

Mr. Mitchell: In Hereford, Midland Red was able to concentrate a huge number of vehicles on one front in order deliberately to drive the competition into the ground. It even went as far as running free services. That will not happen when we apply deregulation to the country as a whole. No major operator will be able to concentrate on one front as it will be assailed on all fronts. That means that there will be a much more even balance of competition than in the trial area.
My hon. Friend the Member for Wellingborough put the case for competitive franchises. That would be some improvement on the present position, but it has the inherent disadvantage that the pattern of services is decided by county transport planners, not by the market. Under franchising, we would never know how much the market could do on its own. The franchising system would lack flexibility and, worst of all, once a franchise was awarded the competitive pressure would be off. Therefore, although it would be some improvement, it would be nothing like enough to revitalise the industry.
I urge those thinking about the advantages of franchising to consider what would happen in, for example, Manchester if the NBC won the franchise and the PTE lost it. How many bus drivers and other people would be out of work as a result of that? Before advocating franchising I urge them to think carefully about how dangerous that course would be.
Throughout the debate we have heard complaints about safety. We have been told that there is a cowboys' charter. That was mentioned by the right hon. Member for Mansfield and the hon. Member for Hartlepool. The right hon. Member for Halton (Mr. Oakes) said that thousands of people would be maimed. I have never heard such hysterical nonsense. There is no evidence to show that the private sector is any worse than the public sector in the safety of its vehicles. The annual tests show that the NCB has a pass rate of 60 per cent., the private sector a pass rate of 56 per cent.—a little worse, but not much—while the PTEs have a pass rate of only 49 per cent. and London Transport of only 47 per cent. Therefore, no one can say that the private sector is worse than the public sector.
I shall go further and say that recently a random check was made on 5 per cent. of London Transport buses, and 51 per cent. were put off the roads immediately with prohibition orders as unsafe. I hope that no one will suggest that public sector vehicles are safer than private sector vehicles.

Mr. Fry: Does my hon. Friend accept that two distinct sets of statistics published in Hansard were rather contradictory? Does he recall that I tabled a further parliamentary question, the answer to which showed that after some minor adjustments the public sector was able to pass a higher percentage of its vehicles than the private sector—and my hon. Friend answered that question.

Mr. Mitchell: My hon. Friend is correct. The reason is that most of the public sector operators have their tests carried out on their premises while most of the private sector operators have to take their vehicles several miles to the testing stations. Therefore, if a light bulb does not work the fault can be repaired immediately on the premises when the tests are being carried out; and that facility is not generally available to the private operator.
My hon. Friend the Member for Wellingborough asked for an assurance on the number of inspectors. We are


recruiting more inspectors and we shall devote sufficient resources to ensure that there are enough to cover the extra number of operators.
When the House debated the deregulation of long-distance coaches we had all the arguments about cowboys, people being maimed, and so on. But since deregulation took place for long-distance coaches their accident involvement is down by 20 per cent.
My hon. Friend asked why we did not have the same financial requirements for a bus operator's licence as for an HGV licence. I can assure him and the House that we do. They are identical.
Eliza Doolittle, in that famous line, said
In Hertford, Hereford and Hampshire hurricanes hardly happen.
But in Hereford they certainly have, as has been made clear to the House. The county council found a 2 per cent. increase in rural mileage and a 38 per cent. saving in ratepayers' money. There were lower fares, more people travelled by bus and there was an end to the complaints which have been a recurring feature of the debate from many of my hon. Friends. Indeed, I wonder sometimes whether the story which appeared in Marketing on 17 November 1983 was entirely apocryphal:
A local authority, told that its bus drivers were speeding past queues of people with a smile and wave of the hand, replied, 'It is impossible for drivers to keep to their timetables if they have to stop for passengers'.
One of the features that has become increasingly apparent as the debate has progressed is the change in attitude which is brought about by competition and that is one of the things which has become most clear in the case of Hereford. The town council complained about bus siting difficulties, fumes and congestion; but the passengers loved it. I have talked to many people there. For example, it has been said:
They come in one heap—two Midland, one Primrose and another Midland Red;
and
I prefer Primrose, they are more entertaining, the drivers more friendly;
and
They are cheaper now. There is a bit of rivalry. It means the service is better;
and
They run to a schedule now, not just when they like.
A young man, visiting from west Yorkshire, said:
Where I come from the buses do not run so late and they cost more. I do not use them often but it is cheap and the last bus is after 11 o'clock at night".
I could go on with example after example.
What I can say, without any risk of contradiction, is that there is no doubt that the people of Hereford, having tasted competition and the advantages which it has brought, do not want to go back to the old system of monopoly.
The hon. Member for Wigan said, wrongly, that these proposals are built on one trial area. That is not true. They are built on three principles—privatisation, opportunity and competition. I do not expect Labour Members to support privatisation, but Conservative Members believe fundamentally in spreading power, wealth and decision making throughout the community, not concentrating it in the hands of the state. This privatisation will give a lot more people a chance to be shareholders, participators and owners with a stake in Britain's wealth. It represents opportunity because it will provide for the removal of

barriers to new bus operators and enable small businesses to be born and to grow, providing a service to the public. Competition is the surest way to improve service to the customer, which is what the Bill is for. I ask the House to give it full support tonight.

Mr. Fry: In view of the concession made by the Government—and as I have made my point on behalf of the Select Committee on Transport and on behalf of all Select Committees—I beg to ask leave to withdraw the amendment.

Hon. Members: No.

Mr. Speaker: In view of that reaction, I must put the Question.

Question put, That the amendment be made:—

The Housed divided: Ayes 210, Noes 290.

Division 99]
[10 pm


AYES


Abse, Leo
Dobson, Frank


Adams, Allen (Paisley N)
Dormand, Jack


Alton, David
Douglas, Dick


Anderson, Donald
Dover, Den


Archer, Rt Hon Peter
Dubs, Alfred


Ashdown, Paddy
Duffy, A. E. P.


Ashley, Rt Hon Jack
Dunwoody, Hon Mrs G.


Ashton, Joe
Eadie, Alex


Atkinson, N. (Tottenham)
Eastham, Ken


Bagier, Gordon A. T.
Edwards, Bob (W'h'mpt'n SE)


Banks, Tony (Newham NW)
Ellis, Raymond


Barnett, Guy
Evans, John (St. Helens N)


Barron, Kevin
Ewing, Harry


Beckett, Mrs Margaret
Fatchett, Derek


Beith, A. J.
Fields, T. (L'pool Broad Gn)


Bennett, A. (Dent'n &amp; Red'sh)
Fisher, Mark


Bevan, David Gilroy
Flannery, Martin


Bidwell, Sydney
Foot, Rt Hon Michael


Blair, Anthony
Forrester, John


Boothroyd, Miss Betty
Foster, Derek


Boyes, Roland
Foulkes, George


Bray, Dr Jeremy
Fraser, J. (Norwood)


Brown, Gordon (D'f'mline E)
Freeson, Rt Hon Reginald


Brown, Hugh D. (Provan)
Freud, Clement


Brown, N. (N'c'tle-u-Tyne E)
Fry, Peter


Brown, Ron (E'burgh, Leith)
Garrett, W. E.


Bruce, Malcolm
George, Bruce


Buchan, Norman
Gilbert, Rt Hon Dr John


Caborn, Richard
Godman, Dr Norman


Callaghan, Jim (Heyw'd &amp; M)
Golding, John


Campbell, Ian
Gould, Bryan


Campbell-Savours, Dale
Gourlay, Harry


Carlile, Alexander (Montg'y)
Hamilton, James (M'well N)


Carter-Jones, Lewis
Hamilton, W. W. (Central Fife)


Clark, Dr David (S Shields)
Hancock, Mr. Michael


Clarke, Thomas
Hardy, Peter


Clay, Robert
Harman, Ms Harriet


Clwyd, Mrs Ann
Harrison, Rt Hon Walter


Cocks, Rt Hon M. (Bristol S.)
Hart, Rt Hon Dame Judith


Cohen, Harry
Hattersley, Rt Hon Roy


Coleman, Donald
Heffer, Eric S.


Concannon, Rt Hon J. D.
Hogg, N. (C'nauld &amp; Kilsyth)


Conlan, Bernard
Holland, Stuart (Vauxhall)


Cook, Frank (Stockton North)
Home Robertson, John


Cook, Robin F. (Livingston)
Howell, Rt Hon D. (S'heath)


Cowans, Harry
Howells, Geraint


Cox, Thomas (Tooting)
Hoyle, Douglas


Craigen, J. M.
Hughes, Dr. Mark (Durham)


Crowther, Stan
Hughes, Robert (Aberdeen N)


Cunliffe, Lawrence
Hughes, Roy (Newport East)


Cunningham, Dr John
Hughes, Sean (Knowsley S)


Dalyell, Tam
Hughes, Simon (Southwark)


Davies, Rt Hon Denzil (L'lli)
John, Brynmor


Davies, Ronald (Caerphilly)
Johnston, Russell


Davis, Terry (B'ham, H'ge H'l)
Jones, Barry (Alyn &amp; Deeside)


Deakins, Eric
Kaufman, Rt Hon Gerald


Dewar, Donald
Kennedy, Charles


Dixon, Donald
Kirkwood, Archy






Lambie, David
Rees, Rt Hon M. (Leeds S)


Lamond, James
Richardson, Ms Jo


Leadbitter, Ted
Roberts, Allan (Bootle)


Leighton, Ronald
Roberts, Ernest (Hackney N)


Lewis, Ron (Carlisle)
Robertson, George


Lewis, Terence (Worsley)
Robinson, G. (Coventry NW)


Litherland, Robert
Rogers, Allan


Lloyd, Tony (Stretford)
Ross, Stephen (Isle of Wight)


Lofthouse, Geoffrey
Rowlands, Ted


Loyden, Edward
Sedgemore, Brian


McCartney, Hugh
Sheerman, Barry


McDonald, Dr Oonagh
Sheldon, Rt Hon R.


McGuire, Michael
Shore, Rt Hon Peter


McKay, Allen (Penistone)
Short, Ms Clare (Ladywood)


McKelvey, William
Short, Mrs R. (W'hampt'n NE)


Mackenzie, Rt Hon Gregor
Skinner, Dennis


Maclennan, Robert
Smith, C. (Isl'ton S &amp; F'bury)


McNamara, Kevin
Smith, Cyril (Rochdale)


McTaggart, Robert
Smith, Rt Hon J. (M'kl'ds E)


McWilliam, John
Snape, Peter


Madden, Max
Soley, Clive


Marek, Dr John
Spearing, Nigel


Marshall, David (Shettleston)
Steel, Rt Hon David


Mason, Rt Hon Roy
Stewart, Rt Hon D. (W Isles)


Maynard, Miss Joan
Stott, Roger


Meacher, Michael
Strang, Gavin


Meadowcroft, Michael
Straw, Jack


Michie, William
Thomas, Dafydd (Merioneth)


Mikardo, Ian
Thomas, Dr R. (Carmarthen)


Millan, Rt Hon Bruce
Thompson, J. (Wansbeck)


Miller, Dr M. S. (E Kilbride)
Thorne, Stan (Preston)


Mitchell, Austin (G't Grimsby)
Tinn, James


Morris, Rt Hon J. (Aberavon)
Torney, Tom


Nellist, David
Wainwright, R.


Oakes, Rt Hon Gordon
Wardell, Gareth (Gower)


O'Brien, William
Wareing, Robert


O'Neill, Martin
Weetch, Ken


Orme, Rt Hon Stanley
Welsh, Michael


Owen, Rt Hon Dr David
White, James


Park, George
Wigley, Dafydd


Parry, Robert
Williams, Rt Hon A.


Patchett, Terry
Winnick, David


Pavitt, Laurie
Woodall, Alec


Pendry, Tom
Wrigglesworth, Ian


Penhaligon, David
Young, David (Bolton SE)


Pike, Peter



Prescott, John
Tellers for the Ayes:


Randall, Stuart
Mr. Frank Haynes and


Redmond, M.
Mr. John Maxton.




NOES


Adley, Robert
Braine, Rt Hon Sir Bernard


Alexander, Richard
Bright, Graham


Alison, Rt Hon Michael
Brinton, Tim


Amess, David
Brittan, Rt Hon Leon


Ancram, Michael
Brooke, Hon Peter


Arnold, Tom
Brown, M. (Brigg &amp; Cl'thpes)


Ashby, David
Browne, John


Aspinwall, Jack
Bryan, Sir Paul


Atkins, Rt Hon Sir H.
Buchanan-Smith, Rt Hon A.


Atkins, Robert (South Ribble)
Buck, Sir Antony


Atkinson, David (B'm'th E)
Budgen, Nick


Baker, Rt Hon K. (Mole Vall'y)
Bulmer, Esmond


Baker, Nicholas (N Dorset)
Burt, Alistair


Baldry, Tony
Butcher, John


Banks, Robert (Harrogate)
Butler, Hon Adam


Beaumont-Dark, Anthony
Butterfill, John


Beggs, Roy
Carlisle, John (N Luton)


Bellingham, Henry
Carlisle, Kenneth (Lincoln)


Bendall, Vivian
Carttiss, Michael


Benyon, William
Cash, William


Best, Keith
Chalker, Mrs Lynda


Biffen, Rt Hon John
Chapman, Sydney


Biggs-Davison, Sir John
Chope, Christopher


Blackburn, John
Churchill, W. S.


Bonsor, Sir Nicholas
Clark, Dr Michael (Rochford)


Boscawen, Hon Robert
Clark, Sir W. (Croydon S)


Bowden, A. (Brighton K'to'n)
Clarke, Rt Hon K. (Rushcliffe)


Bowden, Gerald (Dulwich)
Clegg, Sir Walter


Boyson, Dr Rhodes
Cockeram, Eric





Colvin, Michael
Hunter, Andrew


Conway, Derek
Irving, Charles


Coombs, Simon
Jackson, Robert


Cope, John
Jenkin, Rt Hon Patrick


Cormack, Patrick
Jessel, Toby


Cranborne, Viscount
Johnson Smith, Sir Geoffrey


Crouch, David
Jones, Gwilym (Cardiff N)


Currie, Mrs Edwina
Jones, Robert (W Herts)


Dickens, Geoffrey
Joseph, Rt Hon Sir Keith


Dicks, Terry
Kellett-Bowman, Mrs Elaine


Dorrell, Stephen
Key, Robert


Douglas-Hamilton, Lord J.
King, Rt Hon Tom


du Cann, Rt Hon Sir Edward
Knight, Gregory (Derby N)


Dunn, Robert
Knight, Mrs Jill (Edgbaston)


Durant, Tony
Knowles, Michael


Dykes, Hugh
Knox, David


Edwards, Rt Hon N. (P'broke)
Lamont, Norman


Eggar, Tim
Lang, Ian


Emery, Sir Peter
Latham, Michael


Evennett, David
Lawler, Geoffrey


Eyre, Sir Reginald
Lawrence, Ivan


Fairbairn, Nicholas
Lawson, Rt Hon Nigel


Farr, Sir John
Leigh, Edward (Gainsbor'gh)


Favell, Anthony
Lennox-Boyd, Hon Mark


Fenner, Mrs Peggy
Lilley, Peter


Finsberg, Sir Geoffrey
Lloyd, Ian (Havant)


Forman, Nigel
Lloyd, Peter, (Fareham)


Forsyth, Michael (Stirling)
Luce, Richard


Forth, Eric
McCrindle, Robert


Fowler, Rt Hon Norman
McCurley, Mrs Anna


Fox, Marcus
MacGregor, John


Franks, Cecil
MacKay, John (Argyll &amp; Bute)


Fraser, Peter (Angus East)
Maclean, David John


Freeman, Roger
Maginnis, Ken


Galley, Roy
Major, John


Glyn, Dr Alan
Malone, Gerald


Goodlad, Alastair
Marland, Paul


Gorst, John
Mather, Carol


Gow, Ian
Maxwell-Hyslop, Robin


Gower, Sir Raymond
Mayhew, Sir Patrick


Grant, Sir Anthony
Mellor, David


Greenway, Harry
Merchant, Piers


Gregory, Conal
Miller, Hal (B'grove)


Griffiths, Peter (Portsm'th N)
Mitchell, David (NW Hants)


Grist, Ian
Molyneaux, Rt Hon James


Ground, Patrick
Monro, Sir Hector


Gummer, John Selwyn
Morris, M. (N'hampton, S)


Hamilton, Hon A. (Epsom)
Morrison, Hon C. (Devizes)


Hamilton, Neil (Tatton)
Morrison, Hon P. (Chester)


Hampson, Dr Keith
Moynihan, Hon C.


Hannam, John
Neale, Gerrard


Hargreaves, Kenneth
Needham, Richard


Harris, David
Nelson, Anthony


Harvey, Robert
Newton, Tony


Haselhurst, Alan
Nicholls, Patrick


Havers, Rt Hon Sir Michael
Norris, Steven


Hawkins, C. (High Peak)
Onslow, Cranley


Hawkins, Sir Paul (SW N'folk)
Ottaway, Richard


Hawksley, Warren
Page, Sir John (Harrow W)


Hayes, J.
Parris, Matthew


Hayhoe, Barney
Patten, John (Oxford)


Hayward, Robert
Pattie, Geoffrey


Heddle, John
Peacock, Mrs Elizabeth


Henderson, Barry
Pollock, Alexander


Heseltine, Rt Hon Michael
Porter, Barry


Hickmet, Richard
Powell, Rt Hon J. E. (S Down)


Hicks, Robert
Powley, John


Higgins, Rt Hon Terence L.
Proctor, K. Harvey


Hill, James
Raison, Rt Hon Timothy


Hind, Kenneth
Renton, Tim


Hogg, Hon Douglas (Gr'th'm)
Rhodes James, Robert


Holt, Richard
Rhys Williams, Sir Brandon


Hordern, Peter
Ridley, Rt Hon Nicholas


Howard, Michael
Rippon, Rt Hon Geoffrey


Howarth, Alan (Stratf'd-on-A)
Roberts, Wyn (Conwy)


Howarth, Gerald (Cannock)
Robinson, Mark (N'port W)


Howell, Rt Hon D. (G'ldford)
Roe, Mrs Marion


Howell, Ralph (N Norfolk)
Rossi, Sir Hugh


Hubbard-Miles, Peter
Rost, Peter


Hunt, David (Wirral)
Rowe, Andrew






Rumbold, Mrs Angela
Thompson, Donald (Calder V)


Ryder, Richard
Thompson, Patrick (N'ich N)


Sainsbury, Hon Timothy
Thornton, Malcolm


St. John-Stevas, Rt Hon N.
Townend, John (Bridlington)


Sayeed, Jonathan
Townsend, Cyril D. (B'heath)


Shaw, Giles (Pudsey)
Tracey, Richard


Shaw, Sir Michael (Scarb')
Trippier, David


Shelton, William (Streatham)
Twinn, Dr Ian


Shepherd, Colin (Hereford)
van Straubenzee, Sir W.


Shepherd, Richard (Aldridge)
Vaughan, Sir Gerard


Shersby, Michael
Viggers, Peter


Silvester, Fred
Waddington, David


Skeet, T. H. H.
Wakeham, Rt Hon John


Smith, Sir Dudley (Warwick)
Waldegrave, Hon William


Smith, Tim (Beaconsfield)
Walker, Cecil (Belfast N)


Soames, Hon Nicholas
Walker, Rt Hon P. (W'cester)


Speed, Keith
Wall, Sir Patrick


Speller, Tony
Waller, Gary


Spence, John
Ward, John


Spencer, Derek
Wardle, C. (Bexhill)


Spicer, Michael (S Worcs)
Warren, Kenneth


Squire, Robin
Watson, John


Stanbrook, Ivor
Watts, John


Steen, Anthony
Wells, Sir John (Maidstone)


Stern, Michael
Whitfield, John


Stevens, Lewis (Nuneaton)
Whitney, Raymond


Stevens, Martin (Fulham)
Wiggin, Jerry


Stewart, Allan (Eastwood)
Wilkinson, John


Stewart, Andrew (Sherwood)
Wolfson, Mark


Stokes, John
Wood, Timothy


Stradling Thomas, J.
Woodcock, Michael


Sumberg, David
Yeo, Tim


Taylor, John (Solihull)
Young, Sir George (Acton)


Taylor, Teddy (S'end E)
Younger, Rt Hon George


Tebbit, Rt Hon Norman



Temple-Morris, Peter
Tellers for the Noes:


Thatcher, Rt Hon Mrs M.
Mr. Michael Neubert and


Thomas, Rt Hon Peter
Mr. Tristan Garel-Jones.

Question accordingly negatived.

Main Question put forthwith pursuant to Standing Order No. 41 (Amendment on Second or Third Reading):—

The House divided: Ayes 288, Noes 205.

Division No. 100]
[10.13 pm


AYES


Adley, Robert
Brinton, Tim


Alexander, Richard
Brittan, Rt Hon Leon


Alison, Rt Hon Michael
Brooke, Hon Peter


Amess, David
Brown, M. (Brigg &amp; Cl'thpes)


Ancram, Michael
Browne, John


Arnold, Tom
Bryan, Sir Paul


Ashby, David
Buchanan-Smith, Rt Hon A.


Aspinwall, Jack
Buck, Sir Antony


Atkins, Rt Hon Sir H.
Budgen, Nick


Atkins, Robert (South Ribble)
Bulmer, Esmond


Atkinson, David (B'm'th E)
Burt, Alistair


Baker, Rt Hon K. (Mole Vall'y)
Butcher, John


Baker, Nicholas (N Dorset)
Butler, Hon Adam


Baldry, Tony
Butterfill, John


Banks, Robert (Harrogate)
Carlisle, John (N Luton)


Beaumont-Dark, Anthony
Carlisle, Kenneth (Lincoln)


Beggs, Roy
Carttiss, Michael


Bellingham, Henry
Cash, William


Bendall, Vivian
Chalker, Mrs Lynda


Benyon, William
Chapman, Sydney


Best, Keith
Chope, Christopher


Biffen, Rt Hon John
Churchill, W. S.


Biggs-Davison, Sir John
Clark, Sir W. (Croydon S)


Blackburn, John
Clarke, Rt Hon K. (Rushcliffe)


Bonsor, Sir Nicholas
Clegg, Sir Walter


Boscawen, Hon Robert
Cockeram, Eric


Bowden, A. (Brighton K'to'n)
Colvin, Michael


Bowden, Gerald (Dulwich)
Conway, Derek


Boyson, Dr Rhodes
Coombs, Simon


Braine, Rt Hon Sir Bernard
Cope, John


Bright, Graham
Cormack, Patrick





Crouch, David
Johnson Smith, Sir Geoffrey


Currie, Mrs Edwina
Jones, Gwilym (Cardiff N)


Dickens, Geoffrey
Jones, Robert (W Herts)


Dicks, Terry
Joseph, Rt Hon Sir Keith


Dorrell, Stephen
Kellett-Bowman, Mrs Elaine


Douglas-Hamilton, Lord J.
Key, Robert


Dover, Den
King, Roger (B'ham N'field)


du Cann, Rt Hon Sir Edward
King, Rt Hon Tom


Dunn, Robert
Knight, Gregory (Derby N)


Durant, Tony
Knight, Mrs Jill (Edgbaston)


Dykes, Hugh
Knowles, Michael


Edwards, Rt Hon N. (P'broke)
Knox, David


Emery, Sir Peter
Lamont, Norman


Evennett, David
Lang, Ian


Eyre, Sir Reginald
Latham, Michael


Fairbairn, Nicholas
Lawler, Geoffrey


Farr, Sir John
Lawrence, Ivan


Favell, Anthony
Lawson, Rt Hon Nigel


Fenner, Mrs Peggy
Leigh, Edward (Gainsbor'gh)


Finsberg, Sir Geoffrey
Lilley, Peter


Forman, Nigel
Lloyd, Ian (Havant)


Forsyth, Michael (Stirling)
Luce, Richard


Forth, Eric
McCrindle, Robert


Fowler, Rt Hon Norman
McCurley, Mrs Anna


Fox, Marcus
MacGregor, John


Franks, Cecil
MacKay, John (Argyll &amp; Bute)


Fraser, Peter (Angus East)
Maclean, David John


Freeman, Roger
Maginnis, Ken


Galley, Roy
Major, John


Garel-Jones, Tristan
Malone, Gerald


Glyn, Dr Alan
Marland, Paul


Goodlad, Alastair
Mather, Carol


Gorst, John
Maxwell-Hyslop, Robin


Gow, Ian
Mayhew, Sir Patrick


Gower, Sir Raymond
Mellor, David


Grant, Sir Anthony
Merchant, Piers


Greenway, Harry
Miller, Hal (B'grove)


Gregory, Conal
Mitchell, David (NW Hants)


Griffiths, Peter (Portsm'th N)
Molyneaux, Rt Hon James


Grist, Ian
Monro, Sir Hector


Ground, Patrick
Morris, M. (N'hampton, S)


Gummer, John Selwyn
Morrison, Hon C. (Devizes)


Hamilton, Hon A. (Epsom)
Morrison, Hon P. (Chester)


Hamilton, Neil (Tatton)
Moynihan, Hon C.


Hampson, Dr Keith
Neale, Gerrard


Hannam, John
Needham, Richard


Hargreaves, Kenneth
Nelson, Anthony


Harris, David
Neubert, Michael


Harvey, Robert
Newton, Tony


Haselhurst, Alan
Nicholls, Patrick


Havers, Rt Hon Sir Michael
Norris, Steven


Hawkins, C. (High Peak)
Onslow, Cranley


Hawkins, Sir Paul (SW N'folk)
Ottaway, Richard


Hawksley, Warren
Page, Sir John (Harrow W)


Hayes, J.
Parris, Matthew


Hayhoe, Barney
Patten, John (Oxford)


Hayward, Robert
Pattie, Geoffrey


Heddle, John
Peacock, Mrs Elizabeth


Henderson, Barry
Pollock, Alexander


Heseltine, Rt Hon Michael
Powell, Rt Hon J. E. (S Down)


Hickmet, Richard
Powley, John


Hicks, Robert
Proctor, K. Harvey


Higgins, Rt Hon Terence L.
Raison, Rt Hon Timothy


Hill, James
Renton, Tim


Hind, Kenneth
Rhodes James, Robert


Hogg, Hon Douglas (Gr'th'm)
Rhys Williams, Sir Brandon


Holt, Richard
Ridley, Rt Hon Nicholas


Hordern, Peter
Rippon, Rt Hon Geoffrey


Howard, Michael
Roberts, Wyn (Conwy)


Howarth, Alan (Stratf'd-on-A)
Robinson, Mark (N'port W)


Howarth, Gerald (Cannock)
Roe, Mrs Marion


Howell, Rt Hon D. (G'ldford)
Rossi, Sir Hugh


Howell, Ralph (N Norfolk)
Rost, Peter


Hubbard-Miles, Peter
Rowe, Andrew


Hunt, David (Wirral)
Rumbold, Mrs Angela


Hunter, Andrew
Ryder, Richard


Irving, Charles
Sainsbury, Hon Timothy


Jackson, Robert
St. John-Stevas, Rt Hon N.


Jenkin, Rt Hon Patrick
Sayeed, Jonathan


Jessel, Toby
Shaw, Giles (Pudsey)






Shaw, Sir Michael (Scarb')
Townsend, Cyril D. (B'heath)


Shelton, William (Streatham)
Tracey, Richard


Shepherd, Colin (Hereford)
Trippier, David


Shepherd, Richard (Aldridge)
Twinn, Dr Ian


Shersby, Michael
van Straubenzee, Sir W.


Silvester, Fred
Vaughan, Sir Gerard


Skeet, T. H. H.
Viggers, Peter


Smith, Sir Dudley (Warwick)
Waddington, David


Smith, Tim (Beaconsfield)
Wakeham, Rt Hon John


Soames, Hon Nicholas
Waldegrave, Hon William


Speed, Keith
Walker, Cecil (Belfast N)


Spence, John
Walker, Rt Hon P. (W'cester)


Spencer, Derek
Wall, Sir Patrick


Spicer, Michael (S Worcs)
Waller, Gary


Squire, Robin
Ward, John


Stanbrook, Ivor
Wardle, C. (Bexhill)


Steen, Anthony
Warren, Kenneth


Stern, Michael
Watson, John


Stevens, Lewis (Nuneaton)
Watts, John


Stevens, Martin (Fulham)
Wells, Sir John (Maidstone)


Stewart, Allan (Eastwood)
Whitfield, John


Stewart, Andrew (Sherwood)
Whitney, Raymond


Stokes, John
Wiggin, Jerry


Stradling Thomas, J.
Wilkinson, John


Sumberg, David
Wolfson, Mark


Taylor, John (Solihull)
Wood, Timothy


Taylor, Teddy (S'end E)
Woodcock, Michael


Tebbit, Rt Hon Norman
Yeo, Tim


Temple-Morris, Peter
Young, Sir George (Acton)


Thatcher, Rt Hon Mrs M.
Younger, Rt Hon George


Thomas, Rt Hon Peter



Thompson, Donald (Calder V)
Tellers for the Ayes:


Thompson, Patrick (N'ich N)
Mr. Mark Lennox-Boyd and


Thornton, Malcolm
Mr. Peter Lloyd.


Townend, John (Bridlington)





NOES


Abse, Leo
Concannon, Rt Hon J. D.


Adams, Allen (Paisley N)
Conlan, Bernard


Alton, David
Cook, Frank (Stockton North)


Anderson, Donald
Cook, Robin F. (Livingston)


Archer, Rt Hon Peter
Cowans, Harry


Ashdown, Paddy
Cox, Thomas (Tooting)


Ashley, Rt Hon Jack
Craigen, J. M.


Ashton, Joe
Crowther, Stan


Atkinson, N. (Tottenham)
Cunliffe, Lawrence


Bagier, Gordon A. T.
Cunningham, Dr John


Banks, Tony (Newham NW)
Dalyell, Tarn


Barnett, Guy
Davies, Rt Hon Denzil (L'lli)


Barron, Kevin
Davies, Ronald (Caerphilly)


Beckett, Mrs Margaret
Davis, Terry (B'ham, H'ge H'l)


Beith, A. J.
Deakins, Eric


Bennett, A. (Dent'n &amp; Red'sh)
Dewar, Donald


Bidwell, Sydney
Dixon, Donald


Blair, Anthony
Dobson, Frank


Boothroyd, Miss Betty
Dormand, Jack


Boyes, Roland
Douglas, Dick


Bray, Dr Jeremy
Dubs, Alfred


Brown, Gordon (D'f'mline E)
Duffy, A. E. P.


Brown, Hugh D. (Provan)
Dunwoody, Hon Mrs G.


Brown, N. (N'c'tle-u-Tyne E)
Eadie, Alex


Brown, Ron (E'burgh, Leith)
Eastham, Ken


Bruce, Malcolm
Ellis, Raymond


Buchan, Norman
Evans, John (St. Helens N)


Caborn, Richard
Ewing, Harry


Callaghan, Jim (Heyw'd &amp; M)
Fatchett, Derek


Campbell, Ian
Fields, T. (L'pool Broad Gn)


Campbell-Savours, Dale
Fisher, Mark


Carlile, Alexander (Montg'y)
Flannery, Martin


Carter-Jones, Lewis
Foot, Rt Hon Michael


Clark, Dr David (S Shields)
Forrester, John


Clarke, Thomas
Foster, Derek


Clay, Robert
Foulkes, George


Clwyd, Mrs Ann
Fraser, J. (Norwood)


Cocks, Rt Hon M. (Bristol S.)
Freeson, Rt Hon Reginald


Cohen, Harry
Freud, Clement


Coleman, Donald
Garrett, W. E.





George, Bruce
Nellist, David


Gilbert, Rt Hon Dr John
Oakes, Rt Hon Gordon


Godman, Dr Norman
O'Brien, William


Golding, John
O'Neill, Martin


Gould, Bryan
Orme, Rt Hon Stanley


Gourlay, Harry
Owen, Rt Hon Dr David


Hamilton, James (M'well N)
Park, George


Hamilton, W. W. (Central Fife)
Parry, Robert


Hancock, Mr. Michael
Patchett, Terry


Hardy, Peter
Pavitt, Laurie


Harman, Ms Harriet
Penhaligon, David


Harrison, Rt Hon Walter
Pike, Peter


Hart, Rt Hon Dame Judith
Prescott, John


Hattersley, Rt Hon Roy
Randall, Stuart


Heffer, Eric S.
Redmond, M.


Hogg, N. (C'nauld &amp; Kilsyth)
Rees, Rt Hon M. (Leeds S)


Holland, Stuart (Vauxhall)
Richardson, Ms Jo


Home Robertson, John
Roberts, Allan (Bootle)


Howell, Rt Hon D. (S'heath)
Roberts, Ernest (Hackney N)


Howells, Geraint
Robertson, George


Hoyle, Douglas
Robinson, G. (Coventry NW)


Hughes, Dr. Mark (Durham)
Rogers, Allan


Hughes, Robert (Aberdeen N)
Ross, Stephen (Isle of Wight)


Hughes, Roy (Newport East)
Rowlands, Ted


Hughes, Sean (Knowsley S)
Sedgemore, Brian


Hughes, Simon (Southwark)
Sheerman, Barry


John, Brynmor
Sheldon, Rt Hon R.


Johnston, Russell
Shore, Rt Hon Peter


Jones, Barry (Alyn &amp; Deeside)
Short, Ms Clare (Ladywood)


Kaufman, Rt Hon Gerald
Short, Mrs R. (W'hampt'n NE)


Kennedy, Charles
Skinner, Dennis


Kirkwood, Archy
Smith, C. (Isl'ton S &amp; F'bury)


Lambie, David
Smith, Cyril (Rochdale)


Lamond, James
Smith, Rt Hon J. (M'kl'ds E)


Lead bitter, Ted
Snape, Peter


Leighton, Ronald
Soley, Clive


Lewis, Ron (Carlisle)
Spearing, Nigel


Lewis, Terence (Worsley)
Steel, Rt Hon David


Litherland, Robert
Stewart, Rt Hon D. (W Isles)


Lloyd, Tony (Stretford)
Stott, Roger


Lofthouse, Geoffrey
Strang, Gavin


Loyden, Edward
Straw, Jack


McCartney, Hugh
Thomas, Dafydd (Merioneth)


McDonald, Dr Oonagh
Thomas, Dr R. (Carmarthen)


McGuire, Michael
Thompson, J. (Wansbeck)


McKay, Allen (Penistone)
Thorne, Stan (Preston)


McKelvey, William
Tinn, James


Mackenzie, Rt Hon Gregor
Torney, Tom


Maclennan, Robert
Wainwright, R.


McNamara, Kevin
Wardell, Gareth (Gower)


McTaggart, Robert
Wareing, Robert


McWilliam, John
Weetch, Ken


Madden, Max
Welsh, Michael


Marek, Dr John
White, James


Marshall, David (Shettleston)
Wigley, Dafydd


Mason, Rt Hon Roy
Williams, Rt Hon A.


Maynard, Miss Joan
Winnick, David


Meacher, Michael
Woodall, Alec


Meadowcroft, Michael
Wrigglesworth, Ian


Michie, William
Young, David (Bolton SE)


Mikardo, Ian



Millan, Rt Hon Bruce
Tellers for the Noes:


Miller, Dr M. S. (E Kilbride)
Mr. Frank Haynes and


Mitchell, Austin (G't Grimsby)
Mr. John Maxton.


Morris, Rt Hon J. (Aberavon)

Bill accordingly read a Second time and committed to a Standing Committee pursuant to Standing Order No. 42 (Committal of Bills).

BUSINESS OF THE HOUSE

Ordered,
That, at this day's sitting, the Motion relating to Ways and Means may be proceeded with, though opposed, until any hour.—[Mr. Archie Hamilton.]

Orders of the Day — Transport Bill [Money]

Queen's Recommendation having been signified—

Motion made, and Question proposed,
That, for the purposes of any Act resulting from the Transport Bill, it is expedient to authorise the extinguishment of liabilities of the National Bus Company in respect of sums lent to it under section 20 of the Transport Act 1962 and the payment out of money provided by Parliament of—
(a) any expenditure of the Secretary of State—

(i) in connection with the dissolution of the National Bus Company;
(ii) in respect of the salaries or remuneration of traffic commissioners and persons acting as their officers and servants;
(iii) in respect of the remuneration of members of the Transport Tribunal and the other expenses of the tribunal;
(iv) in making grants to persons operating or proposing to operate public passenger transport services in rural areas in Great Britain; and
(v) in making grants to the British Railways Board in respect of their costs in securing the provision of bus substitution services;

(b) any increase in payments out of money so provided arising from any increase in administrative expenses of the Secretary of State attributable to the provisions of that Act; and
(c) any increase in payments out of money so provided under any other enactment.—[Mr. Ridley.]

Mr. Roy Hughes: In discussing this money resolution as a Welsh Member of this House, I should be remiss if I did not express the concern and consternation that is felt in Wales both among the employees of bus undertakings, local authorities and officials and among the elected representatives about the provisions of the Bill. They will increasingly affect ordinary members of the public.
As for the money resolution, it seems to me that the objective of the Secretary of State is to cut out subsidies altogether or severely to reduce them, entirely irrespective of their merit. It is a doctrinaire approach on the part of the Secretary of State.
There is a financial provision in the Bill, clause 89, which enables the Secretary of State to make grants to operators of public passenger transport in rural areas. The amount is fairly negligible and is certainly quite inadequate to meet the problem that will be confronted. Already a non-partisan body, the National Federation of Women's Institutes, has pointed out that the effect of deregulation on tendering will be disastrous for those people who live in rural areas. A small concession has been made, but presumably this is only because of the pressure exerted by bodies like the National Federation of Women's Institutes.
I think of the pensioner on the outskirts of Newport who wrote to me:
I am a pensioner. I am also disabled. Our local council has done a wonderful job in the circumstances. Our bus service is excellent.
What a tribute, bearing in mind all the attacks that bus undertakings have received from the Secretary of State.
From my experience I endorse the sentiments of that pensioner. Where a local authority is providing a good bus service, surely it should be left alone. The local authorities have operated in difficult circumstances. They need every possible encouragement and not the punitive measures that are contained in the Bill.
The Secretary of State proposes to hive off local authority bus undertakings into separate companies. As I see it, the wish is to make them insolvent, so that they can then be sold off cheaply to private operators. As a result, undoubtedly it is the needy and the less affluent members of society who will suffer.
Another provision concerns the National Bus Company. The intention is to privatise it—or, rather, to split it into smaller units. That organisation has functioned successfully in difficult circumstances. How much does the nation stand to lose if it is sold off? I hope that the Minister will give us facts and figures tonight.
Another financial provision, contained in clause 90, empowers the Secretary of State to make regulations restricting the payment of grants towards duty charged on bus fuel to operators of local services. Likewise, clause 91 provides for a reduction of fuel duty grant where services are unregistered or unreliable. I do not doubt that there will be many unreliable services if the Secretary of State's proposals come to fruition.
When history is written, the Government will be known by the slogan, "If it moves, privatise it." This sort of policy is unsound politically and economically. Certainly it has done the country immense harm. Anyone who believes that the proposals in the Bill and the money resolution will provide a better bus service for the citizens of Britain must live in cloud-cuckoo-land.

Mr. Anthony Steen: I wish to assist my right hon. Friend the Secretary of State for Transport by saying that I believe that this money resolution follows the Second Reading of one of the most exciting developments that is likely to occur in public transport. It is imaginative and visionary and gives new hope for the consumer and new scope for operators. The proposals will sweep away the rules and regulations, free the public monopoly and build up opportunities for competition.
The Bill is about deregulation of an industry, allowing it to revert to normal business practice without Government intervention. We know, that with public funds and finance, the more that the Government intervene, the more they distort. For example, Liverpool has been buffeted by successive Governments constantly pouring money into a city that has declined the more that that money has been poured in. The more money that is poured in, the greater has been the distortion that has taken place, and the more difficult it has been for private enterprise to flourish.
Through the Bill, the money that is being poured into the bus industry will be released, revived and altered so that the progressive decline will be halted. That is the message. More public money does not result in better services and better value for money. In the most subtle and enterprising way the Secretary of State is trying to stop the intervention that has resulted in the decline of bus services.
Where does my right hon. Friend the Secretary of State see the role of the community bus? At the moment, this service gets a lot of help from the local authorities. It gets funding from the public sector by way of a bus, and then volunteers drive the bus. There is a good example of that in my constituency, the Coleridge bus, which serves Kingsbridge. The Exe Market Valley bus serves the Tiverton constituency, and the Tavistock community bus serves the elderly in Tavistock who face difficulties with


the steep hills in that area. All these services are non-profit-making, so will my right hon. Friend explain how this will work, because they have an important and valuable contribution to make?
What will be the financial implications for taxis? Taxi operators have, in many cases, spent large sums of money on their licence plates. It would be helpful if my right hon. Friend will say whether he believes that some transitional arrangements can be made so that those who have invested this money in the industry will not find themselves penniless. It would also be helpful if he said something about taxis operating as buses. Will there be any financial help for the taxi operators who want to develop their services, perhaps by getting larger taxis and running a bus service from some of the villages around the market towns? That would be welcomed in my constituency.
One of the criticisms of the financial provisions as they are set out concerns some of the big bus companies such as Western National, which have withdrawn some of their central services. One of the constant complaints is that Western National has withdrawn its coast service from Plymouth, Salcombe, Dartmouth and Exeter because it was not profitable. The money resolution will affect this company. Does my right hon. Friend see some of the small new enterprises starting in such a way that the people of these towns can look forward to a new, entreprenurial service running along the coast? Is my right hon. Friend thinking of issuing directions on planning regulations to the district councils so that those who start one or two-man businesses from their homes will not be prevented from doing so by district councils saying "You are running a small firm, and you need planning consent." Some opportunities must be provided in that respect.
Will my right hon. Friend the Secretary of State say something about the marginal and fat routes? The fat routes will attract competition. We must be careful to ensure that that competition does not result in closed shops, with the operators doing deals with each other. It would be helpful if my hon. Friend ensured that private enterprise is allowed to develop and compete and ensured that deals are not struck between operators on the fat routes. Unless the operators on the thin routes are given a chance to compete on the fat routes, they may not survive.
The Bill is a cracker. It will crack the monopolies. It will awaken a moribund sunset industry. It will crack restrictive practices. It will crack artificially high fares by allowing healthy competition and the operation of market forces. The Bill will breathe new life into the transport industry and herald a new era for all those wishing to use a better, more flexible and more competitive bus service.

Mr. Richard Caborn: Probably every hon. Member knows that transport fares in south Yorkshire are extremely low. For the past 10 or 12 years, the county council's policy has been to transport people around the county in a convenient and attractive way. This model has been developed with the consent of the broad spectrum of the people in south Yorkshire.
The fare for a two-mile journey in south Yorkshire is 5p, in Manchester and Leeds it is 30p, and in Birmingham, it is 32p. The fare for a 10-mile journey in south Yorkshire is 15p and in Manchester, Leeds and Birmingham it is 70p.
The Secretary of State has said that the number of passengers has declined. The latest available figures for

south Yorkshire show that there are 350 million journeys a year, 264 million of which are provided by the PTE. The population of south Yorkshire is 1·3 million. There has been an increase year on year in the number of passengers carried by the PTE. I believe that the call of the industry is, "The object is to put bums on seats." We have been extremely successful in doing that.
A substantial part of the Government's case for the introduction of the Transport Bill, as outlined in the White Paper and ministerial statements, is based on allegations that the large public operations in general, and PTEs in particular, cause an unreasonable demand for massive increases in subsidies, their operations being inefficient and showing no economies of scale and south Yorkshire being an outstanding example.
Many studies of the bus industry have been made to determine its overall efficiency and the related efficiency of individual units in that industry. The studies include "The Efficiency of British Urban Bus Operators", Transport Studies Group research report No. 8, which was published in December 1982; the Transport and Road Research Laboratory's reports; the Monopolies and Mergers Commission's report on stage carrier services; and the annual inter-PTE comparisons. These have revealed numerous yardsticks by which the industry can be measured. The efficiency of the industry—which has come under some criticism, to say the least, from the Government Benches this evening — ought to be considered very seriously when we draw these comparisons. Of all these yardsticks, the best for comparing similar types of bus operation is the cost per journey. The total cost per journey includes traffic operation, servicing, repairs and maintenance, management, welfare, training and asset utilisation. The south Yorkshire PTE's cost per journey on this basis is 26·4p, which compares with the average for other PTEs of 30·3p. The costs used to calculate these figures come from the inter-PTE comparisons 1983–84.
The Secretary of State for Transport claims that the cost of PTE operations is rising rapidly. The total direct operating costs for south Yorkshire rose from £67·35 million in 1982–83 to £69·64 million in 1983–84, an increase of 3·4 per cent., which is less than the rate of inflation for this period. The real cost of direct operations has, therefore, fallen. In the case of London, which, ironically, is excluded from the delicensing and tendering provisions of this Bill, the increase in direct operation costs was 5·1 per cent.
Developments are taking place in manpower productivity and vehicle maintenance organisation which will produce further savings. The service, repair and maintenance costs in south Yorkshire have been reduced from 48·1p per vehicle mile in 1982–83 to 46·4p per vehicle mile in 1983–84. With the exception of Tyne and Wear, south Yorkshire's costs in this area are the lowest of the PTEs-81 per cent. of London's costs.
The buses White Paper attaches considerable importance to unfavourable comparisons of PTE costs with those of the National Bus Company. A careful study of the appendix to the White Paper shows that the percentage figures quoted are derived from national cost per mile statistics. This is a ridiculous basis of comparison since it involves a massive rural mileage—there was plenty of reference to this in the earlier debate this evening—run by the National Bus Company, where costs per mile are


inevitably very low compared with costs per mile in urban centres where average traffic speeds are low and bus stops are much closer together.
The only true basis on which NBC and PTE costs can be compared is where both are run in the same territory. A comparison on this basis can be obtained from the inter-PTE comparisons summary of county operations 1982–83. This shows that in south Yorkshire PTE direct bus operations costs were 5·46p per passenger mile, while NBC costs were 5·78p per passenger mile. If the Secretary of State continues to insist that the comparison with NBC costs is a useful yardstick of efficiency, it should be pointed out that in the London Transport operating area London Transport's direct bus operation costs more than twice as much per passenger mile as NBC's costs; and London, I say once again, is excluded from the Bill.
A particular criticism made by the Secretary of State is that south Yorkshire spends too much in subsidising cheap fares in relation to the amount it spends on improving its services. An attempt to produce some scientific justification for this criticism of PTEs in general and south Yorkshire in particular was made by the Department of Transport—the Secretary of State's own Department—where work was carried out by the Economics Local Roads and Transport Division using a model developed by Dr. Stephen Glaister of the LSE. The report of this study was published by the Department of Transport in December 1982 and was entitled "Urban transport subsidies: an economic assessment of value for money"—something that I know is very dear to the Secretary of State's heart. This shows the changes in fares and services required so that subsidies could be more effectively employed in the PTE areas and in London.
It is notable that south Yorkshire was the only PTE which was shown to have a correct balance between fares and subsidies, and indeed services. In London, in order to obtain the best use of the subsidy then being provided, a reduction of 11 per cent. in fares and an increase of 19 per cent. in expenditure on services would be required.
The Government attempted to devalue the Glaister model as a means of comparing the efficiency of south Yorkshire's policy with that of some other areas by reducing the fares elasticity factor used in the formula from 0·3 to 0·15 elasticity. They sought to justify this by claiming that at lower fare levels there was lower elasticity. However, the Transport and Road Research Laboratory's study of fares elasticity could not find a corelationship between fare level and demand elasticity that was required to justify this. It could not be disproved that south Yorkshire had the right balance. The Department's 1982 study probably stands as an authoritative justification of the south Yorkshire policy in terms of cost-benefit analysis.
I ask the Secretary of State seriously to consider the south Yorkshire model, which has existed for more than 10 years. We have heard a former Member of the European Parliament speaking tonight from the Conservative Benches. Even the European Parliament's publication held up the south Yorkshire model as one to be followed, as a cost-effective benefit for transportation. I ask the Secretary of State to take on board the contributions from south Yorkshire Members and to use the south Yorkshire model when he is costing his policy.

Mr. Jonathan Sayeed: No one can say with certainty that the Bill will produce enormous savings, dramatically increase public usage and be responsive to all customer demands. However, we can say with conviction that the current system is expensive, inefficient and largely unresponsive to what the public require. Therefore, change is necessary.
Revenue support in Avon has increased over the past 10 years from £66,000 to over £4·5 million, an increase of 6,800 per cent., or 21 times in real terms. At the same time services have been declining. Given the necessity for change, it is essential that we have a system that rewards the making of savings, increases public usage, introduces lower fares and provides services where they are wanted. If it is not implemented, the improvements to bus and taxi services that we all wish to see will not happen. Like it or not—I recognise that some Opposition Members do not like it—the system of reward that is called profit is the cost effective method yet devised for encouraging success.
The essential thrust of the Bill is right. By creating smaller service units, each as a profit centre geared by commercial necessity to public demand, we ensure that what is wanted prospers and what is inefficient, expensive or incompetently run fails.
I am less sure about some of the details of the Bill and the consequent revenue implications. It is essential to get the detail right because insufficient attention to detail will ruin a good and necessary measure.
First, I turn to the taxi provisions and the revenue implications. My right hon. Friend has already heard my hon. Friend the Member for South Hams (Mr. Steen) talking about the problems of taxi drivers. Owner drivers have spent either considerable time or money in obtaining their licences. In Bristol, for example, it takes about seven years to obtain a licence. In other places it will cost about £7,000 to obtain one. It seems that when the Bill is enacted that investment of time or money will count for nought. Indeed, the Bill will penalise the professional and encourage the amateur taxi driver. Under clause 14(2), a district council will be extremely limited in its ability to refuse licences. For instance, a district council will not be able to demand that a taxi driver knows the area before he plies for hire. The Bill will permit a man who has driven the maximum permissible hours in an HGV transporting baked beans round the country to get into a taxi cab and start driving people round the country.
The Bill as drafted will destroy the livelihood of the full-time cabbie because it will allow the part-timer to get into a car which will not necessarily be of the required standard, to take that part of the day which is profitable and to leave the less profitable part to be covered by the professional full-time cabbie.

Mr. Steen: Would my hon. Friend agree that the taxi driver will be able to use his taxi as a bus and therefore that some of the taxis may well develop into small bus services, leaving more room for others, which may be a profitable development?

Mr. Sayeed: What my hon. Friend says is correct, but a longer transitional period is needed in which to allow him to develop that type of expertise. In my hon. Friend's constituency, as, indeed, in the constituencies of most hon. Members, professional cabbies have to work long hours to make a livelihood. We must be careful not to destroy that at a stroke.
I therefore favour the extension of the use of taxis, and I am sure that the current provisions are far too tight. I am sure also that the provisions in the Bill are far too lax. These lax provisions will undermine the fundamental aim of the Bill by adversely affecting the professional driver financially, thus destroying the ability of cabbies to earn a living and to move to larger vehicles and to provide a bus/taxi service.
I deal next with the Hereford and Worcester experiment, which has certain revenue implications. It has been a success, but not a totally unqualified one. First, it is important to recognise that three out of four of the new operators have had their licences revoked at one time or another.

Mrs. Elaine Kellett-Bowman: That demonstrates clearly that the inspectors are doing their job in identifying faulty vehicles. That is what they are paid to do, and it is what they will continue to do.

Mr. Sayeed: I am grateful to my hon. Friend for having made that point, and I will deal with it now. We cannot all be as satisfied as she is.
Even with the present limited number of bus companies, passenger service vehicles are not being inspected in accordance with the law. I should like to know the revenue implications, and how my right hon. Friend seeks to ensure that, when there are more vehicles on the road, with more companies and more depots—some of which might be hard to find, to put it politely—they will be adequately inspected. I suggest that there is a good case on the grounds of safety alone — in addition to protecting passengers from the unprofessional operator who many have charged, and been paid for, season tickets for his service—for ensuring that the asset backing of any company wishing to take on a route is reasonable in relation to the operation that he seeks to run.
My hon. Friend has argued that cross-subsidies allow inefficiency to flourish. He is quite correct. Currently bus companies do not know how much they are losing on a route, and it is obviously essential that they quantify this. If one does not know how much one is losing, one cannot determine the necessary measures to take.
I am not convinced that the proposal to couple deregulation with tendering will assist in providing long-term and efficient services. There needs to be a sensible degree of control over the route licences issued. I ask my right hon. Friend to look at that matter again and determine the revenue implications.
An operator may tender for a route from 6 am to 11 pm and be paid £5,000, but someone operating a school bus takes the profitable part in the morning and evening and destroys the tendering basis of the person who tenders for the whole day. We need some regulation to maintain necessary services. We also need contract terms of sufficient length to encourage investment in modern equipment. Were there the time, I would want to know about bus stations, the construction of bus stops, about timetables and through ticketing services.
The Bill is a good measure. Previously we have had pious hopes and exhortation, which have failed—but not through want of trying. Legislation is necessary, but there needs to be some amendment before Third Reading.

Mr. Bob Clay: Will the Secretary of State say a few words about the position in Tyne and

Wear? We have heard a great deal about the experiment in Hereford and Worcester. It is about time that a tribute was paid to the experiments not only in south Yorkshire but in my area of Tyne and Wear.
The Bill will effectively destroy £283 million investment in an integrated, modern public transport system in Tyne and Wear, with a metro system that is the envy of the world. How on earth can we run a concessionary travel system, when passes go through metro barriers, with any number of different operators? How can we operate a system of through ticketing—we call them transfers—from bus to metro? Fifty-eight per cent. of passengers on the metro use a bus before or after their journey on the metro. How can that system be run with any number of different operators?
For several years, at great but worth while expense, Tyne and Wear has pursued a policy to integrate, integrate, integrate. This Bill will disintegrate the public transport system. A quarter of a million people signed a petition the last time that the Government tried to destroy public transport in that area—out of a total population of only 1 million. They wanted to keep their system. Conservative Members spoke of petitions from rural areas signed by 100 people. It is an insult to the people of Tyne and Wear, who want to maintain the integrated system, that the Secretary of State cannot explain why he is introducing a Bill that will destroy the years and years of patient work and negotiation, when the NBC and the PTE have got the workers to learn new ways and about new machines, and with all the investment in the new ticketing system.
I wish to protest in the strongest possible terms that we have heard more about areas such as Hereford and Worcester than about Tyne and Wear, south Yorkshire, west Yorkshire, the west Midlands and the cities where the mass of our people live.

Mr. Peter Pike: The Secretary of State showed in our earlier debate that he is quite unaware of the disastrous effect that the Bill will have on public transport, especially for the elderly, those in rural areas and those who depend on off-peak and Sunday services. He has also failed to understand the financial consequences of the Bill.
The Government propose to break up the National Bus Company into separate companies. In doing so they will not get the full valuation of that undertaking, which is based on its integrated services throughout the country.
The Government have failed to estimate and understand the financial implications of ensuring that the pension provisions of the employees of the National Bus Company are adequately safeguarded. If the Secretary of State considers the serious financial implications to the Government of the privatisation of the royal ordnance factories for which legislation was enacted in the last parliamentary session to the detriment of employees' pensions and conditions of employment he will see that they will also apply to the National Bus Company.
The Secretary of State has failed to realise the Bill's implications for concessionary fares. They are important to the elderly and disabled people who depend on them and it is not good enough to say that local government will have the right to continue to provide concessionary fares when the reorganisation takes place.
Once the Bill is enacted, the present system of passes which is operated in most areas will cease to exist and


tokens will be introduced which will give a much lower value to the people receiving that concession. If fewer tokens are given there will be serious financial implications for the transport undertakings.
Tendering will be based on low wages and bad conditions. The ending of cross-subsidy and deregulation make it difficult to understand which companies will bid for routes of which they will not have exclusive use.
The Secretary of State must tell us the financial implications of redundancies for local authority transport undertakings. Every service that is lost will mean a reduction in employment. That will have implications for pension contributions and the maintenance of superannuation schemes and will have serious financial implications in the years ahead both on transport undertakings and local authorities.
I regret that I was unable to speak in the previous debate. All aspects of the Bill that the Government are forcing through have serious financial implications.

The Secretary of State for Transport (Mr. Nicholas Ridley): In the brief time that is available to me I shall try to answer as many of the points that have been raised as possible. The hon. Member for Newport, East (Mr. Hughes), although describing this as a "punitive" measure, could not explain why the people of Hereford seemed to enjoy it quite so much, but he did ask the likely value of the National Bus Company, as did the hon. Member for Burnley (Mr. Pike). The debt of the NBC to the Government is currently £128 million. If the various parts are sold for more than that, there will be a net profit. If the various parts are sold for less than that, there wll be a net loss. I am not at all sure that it would have been possible to float the National Bus Company in its present form before even the White Paper was published because it would not have been attractive to the stock market.
My hon. Friend the Member for South Hams (Mr. Steen) asked about community buses. I can assure him that I too have an excellent community bus in my constituency, called the villager bus. Such buses will in future probably be eligible for innovation grants, and for the rural bus grant, and they will most likely be able to tender for subsidised services to the county council. However, my villager bus operates without subsidy and provides and excellent service to a large number of villages. It is the most wonderful new form of innovative village transport, which we want to see spread and encouraged. There will be nothing but help, assistance and encouragement to such arrangements under the provisions of this measure.
My hon. Friends the Members for Bristol, East (Mr. Sayeed) and for South Hams asked about taxi plates. Clause 14 sets out the conditions under which a local authority may or may not grant an extra licence. Exactly how long it will take for a taxi plate to reduce under those conditions is not easy to predict. It will reduce over time, not immediately.
My hon. Friend the Member for Bristol, East should note that there are licensing requirements. If a local authority exercises its power to license taxies—some do and some do not—it will also have power to supervise the quality of the vehicle and the driver in the sense to which my hon. Friend referred, of knowing the geography of the city and so on. Some local authorities do not restrict

taxi licences or have a licensing system; of course, they lose the power to control and supervise. It is a matter for local discretion and I believe that it is right to leave it that way.
I was asked about taxis operating as buses. That will be possible under the Bill. They will be able to register services, in which event they will have to comply with all the requirements of a registered stage service. If they are in country districts, they will be eligible for the various forms of assistance in the Bill. They become, to all intents and purposes, buses.
The hon. Member for Sheffield, Central (Mr. Caborn) and—

It being three-quarters of an hour after the commencement of proceedings on the motion, MR. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 3 (Exempted Business).

The House divided: Ayes 264, Noes 183.

Division No. 101]
[11.11 pm


AYES


Adley, Robert
Colvin, Michael


Alexander, Richard
Conway, Derek


Alison, Rt Hon Michael
Coombs, Simon


Amess, David
Cope, John


Ancram, Michael
Cranborne, Viscount


Arnold, Tom
Crouch, David


Ashby, David
Currie, Mrs Edwina


Aspinwall, Jack
Dickens, Geoffrey


Atkins, Rt Hon Sir H.
Dicks, Terry


Atkins, Robert (South Ribble)
Dorrell, Stephen


Atkinson, David (B'm'th E)
Douglas-Hamilton, Lord J.


Baker, Rt Hon K. (Mole Vall'y)
Dover, Den


Baker, Nicholas (N Dorset)
du Cann, Rt Hon Sir Edward


Baldry, Tony
Dunn, Robert


Banks, Robert (Harrogate)
Durant, Tony


Beaumont-Dark, Anthony
Dykes, Hugh


Beggs, Roy
Eggar, Tim


Bellingham, Henry
Emery, Sir Peter


Bendall, Vivian
Evennett, David


Benyon, William
Eyre, Sir Reginald


Best, Keith
Fairbairn, Nicholas


Biffen, Rt Hon John
Farr, Sir John


Biggs-Davison, Sir John
Favell, Anthony


Blackburn, John
Fenner, Mrs Peggy


Bonsor, Sir Nicholas
Forman, Nigel


Boscawen, Hon Robert
Forsyth, Michael (Stirling)


Bowden, A. (Brighton K'to'n)
Forth, Eric


Bowden, Gerald (Dulwich)
Fowler, Rt Hon Norman


Braine, Rt Hon Sir Bernard
Fox, Marcus


Bright, Graham
Franks, Cecil


Brinton, Tim
Fraser, Peter (Angus East)


Brooke, Hon Peter
Freeman, Roger


Brown, M. (Brigg &amp; Cl'thpes)
Fry, Peter


Browne, John
Galley, Roy


Bryan, Sir Paul
Garel-Jones, Tristan


Buchanan-Smith, Rt Hon A.
Gorst, John


Buck, Sir Antony
Gow, Ian


Budgen, Nick
Gower, Sir Raymond


Bulmer, Esmond
Grant, Sir Anthony


Burt, Alistair
Greenway, Harry


Butler, Hon Adam
Gregory, Conal


Butterfill, John
Griffiths, Peter (Portsm'th N)


Carlisle, John (N Luton)
Ground, Patrick


Carlisle, Kenneth (Lincoln)
Gummer, John Selwyn


Carttiss, Michael
Hamilton, Neil (Tatton)


Cash, William
Hampson, Dr Keith


Chalker, Mrs Lynda
Hannam, John


Chapman, Sydney
Hargreaves, Kenneth


Chope, Christopher
Harris, David


Churchill, W. S.
Haselhurst, Alan


Clark, Dr Michael (Rochford)
Havers, Rt Hon Sir Michael


Clark, Sir W, (Croydon S)
Hawkins, C. (High Peak)


Clarke, Rt Hon K. (Rushcliffe)
Hawkins, Sir Paul (SW N'folk)


Clegg, Sir Walter
Hawksley, Warren


Cockeram, Eric
Hayes, J.






Hayhoe, Barney
Rhys Williams, Sir Brandon


Hayward, Robert
Ridley, Rt Hon Nicholas


Heddle, John
Roberts, Wyn (Conwy)


Henderson, Barry
Robinson, Mark (N'port W)


Heseltine, Rt Hon Michael
Roe, Mrs Marion


Hickmet, Richard
Rossi, Sir Hugh


Higgins, Rt Hon Terence L.
Rowe, Andrew


Hill, James
Rumbold, Mrs Angela


Hind, Kenneth
Ryder, Richard


Hogg, Hon Douglas (Gr'th'm)
Sainsbury, Hon Timothy


Holt, Richard
Sayeed, Jonathan


Hordern, Peter
Shaw, Giles (Pudsey)


Howard, Michael
Shaw, Sir Michael (Scarb')


Howarth, Alan (Stratf'd-on-A)
Shelton, William (Streatham)


Howarth, Gerald (Cannock)
Shepherd, Colin (Hereford)


Howell, Rt Hon D. (G'ldford)
Shepherd, Richard (Aldridge)


Howell, Ralph (N Norfolk)
Shersby, Michael


Hubbard-Miles, Peter
Silvester, Fred


Hunt, David (Wirral)
Skeet, T. H. H.


Hunter, Andrew
Smith, Sir Dudley (Warwick)


Jackson, Robert
Smith, Tim (Beaconsfield)


Jenkin, Rt Hon Patrick
Soames, Hon Nicholas


Jessel, Toby
Speed, Keith


Johnson Smith, Sir Geoffrey
Spence, John


Jones, Gwilym (Cardiff N)
Spencer, Derek


Jones, Robert (W Herts)
Spicer, Michael (S Worcs)


Joseph, Rt Hon Sir Keith
Squire, Robin


Kellett-Bowman, Mrs Elaine
Stanbrook, Ivor


Key, Robert
Steen, Anthony


King, Roger (B'ham N'field)
Stern, Michael


Knight, Gregory (Derby N)
Stevens, Lewis (Nuneaton)


Knight, Mrs Jill (Edgbaston)
Stevens, Martin (Fulham)


Knowles, Michael
Stewart, Allan (Eastwood)


Knox, David
Stewart, Andrew (Sherwood)


Lamont, Norman
Stokes, John


Lang, Ian
Stradling Thomas, J.


Latham, Michael
Sumberg, David


Lawler, Geoffrey
Taylor, John (Solihull)


Lawrence, Ivan
Taylor, Teddy (S'end E)


Lawson, Rt Hon Nigel
Temple-Morris, Peter


Leigh, Edward (Gainsbor'gh)
Thatcher, Rt Hon Mrs M.


Lilley, Peter
Thomas, Rt Hon Peter


Lloyd, Ian (Havant)
Thompson, Donald (Calder V)


Lloyd, Peter, (Fareham)
Thompson, Patrick (N'ich N)


Luce, Richard
Thornton, Malcolm


McCrindle, Robert
Townend, John (Bridlington)


McCurley, Mrs Anna
Townsend, Cyril D. (B'heath)


MacKay, John (Argyll &amp; Bute)
Tracey, Richard


Maclean, David John
Trippier, David


Maginnis, Ken
Twinn, Dr Ian


Major, John
van Straubenzee, Sir W.


Malone, Gerald
Vaughan, Sir Gerard


Marland, Paul
Viggers, Peter


Mather, Carol
Waddington, David


Mayhew, Sir Patrick
Wakeham, Rt Hon John


Mellor, David
Waldegrave, Hon William


Merchant, Piers
Walker, Cecil (Belfast N)


Miller, Hal (B'grove)
Walker, Rt Hon P. (W'cester)


Mitchell, David (NW Hants)
Wall, Sir Patrick


Morris, M. (N'hampton, S)
Waller, Gary


Morrison, Hon C. (Devizes)
Wardle, C. (Bexhill)


Moynihan, Hon C.
Warren, Kenneth


Neale, Gerrard
Watson, John


Needham, Richard
Watts, John


Nelson, Anthony
Wells, Sir John (Maidstone)


Neubert, Michael
Whitfield, John


Newton, Tony
Whitney, Raymond


Nicholls, Patrick
Wiggin, Jerry


Norris, Steven
Wilkinson, John


Onslow, Cranley
Wolfson, Mark


Ottaway, Richard
Wood, Timothy


Page, Sir John (Harrow W)
Woodcock, Michael


Patten, John (Oxford)
Yeo, Tim


Pattie, Geoffrey
Young, Sir George (Acton)


Peacock, Mrs Elizabeth
Younger, Rt Hon George


Pollock, Alexander



Powley, John
Tellers for the Ayes:


Renton, Tim
Mr. Archie Hamilton and


Rhodes James, Robert
Mr. Mark Lennox-Boyd.





NOES


Adams, Allen (Paisley N)
Gould, Bryan


Alton, David
Gourlay, Harry


Anderson, Donald
Hamilton, James (M'well N)


Archer, Rt Hon Peter
Hamilton, W. W. (Central Fife)


Ashdown, Paddy
Hancock, Mr. Michael


Ashton, Joe
Hardy, Peter


Atkinson, N. (Tottenham)
Harman, Ms Harriet


Bagier, Gordon A. T.
Harrison, Rt Hon Walter


Banks, Tony (Newham NW)
Hart, Rt Hon Dame Judith


Barnett, Guy
Haynes, Frank


Barron, Kevin
Heffer, Eric S.


Beckett, Mrs Margaret
Hogg, N. (C'nauld &amp; Kilsyth)


Beith, A. J.
Home Robertson, John


Bennett, A. (Dent'n &amp; Red'sh)
Howell, Rt Hon D. (S'heath)


Bidwell, Sydney
Howells, Geraint


Blair, Anthony
Hoyle, Douglas


Boothroyd, Miss Betty
Hughes, Robert (Aberdeen N)


Boyes, Roland
Hughes, Roy (Newport East)


Bray, Dr Jeremy
Hughes, Sean (Knowsley S)


Brown, Gordon (D'f'mline E)
Hughes, Simon (Southwark)


Brown, Hugh D. (Provan)
John, Brynmor


Brown, N. (N'c'tle-u-Tyne E)
Johnston, Russell


Brown, Ron (E'burgh, Leith)
Jones, Barry (Alyn &amp; Deeside)


Bruce, Malcolm
Kennedy, Charles


Buchan, Norman
Kirkwood, Archy


Caborn, Richard
Lamond, James


Callaghan, Jim (Heyw'd &amp; M)
Leadbitter, Ted


Campbell-Savours, Dale
Leighton, Ronald


Carlile, Alexander (Montg'y)
Lewis, Ron (Carlisle)


Clark, Dr David (S Shields)
Lewis, Terence (Worsley)


Clarke, Thomas
Litherland, Robert


Clay, Robert
Lloyd, Tony (Stretford)


Clwyd, Mrs Ann
Lofthouse, Geoffrey


Cocks, Rt Hon M. (Bristol S.)
Loyden, Edward


Cohen, Harry
McDonald, Dr Oonagh


Coleman, Donald
McGuire, Michael


Concannon, Rt Hon J. D.
McKay, Allen (Penistone)


Conlan, Bernard
McKelvey, William


Cook, Frank (Stockton North)
Mackenzie, Rt Hon Gregor


Cook, Robin F. (Livingston)
McNamara, Kevin


Corbyn, Jeremy
McTaggart, Robert


Cowans, Harry
McWilliam, John


Cox, Thomas (Tooting)
Madden, Max


Craigen, J. M.
Marek, Dr John


Crowther, Stan
Marshall, David (Shettleston)


Cunliffe, Lawrence
Maxton, John


Cunningham, Dr John
Maynard, Miss Joan


Dalyell, Tam
Meacher, Michael


Davies, Ronald (Caerphilly)
Meadowcroft, Michael


Davis, Terry (B'ham, H'ge Hl)
Michie, William


Deakins, Eric
Mikardo, Ian


Dewar, Donald
Millan, Rt Hon Bruce


Dixon, Donald
Miller, Dr M. S. (E Kilbride)


Dormand, Jack
Morris, Rt Hon J. (Aberavon)


Douglas, Dick
Nellist, David


Dubs, Alfred
Oakes, Rt Hon Gordon


Duffy, A. E. P.
O'Brien, William


Dunwoody, Hon Mrs G.
O'Neill, Martin


Eadie, Alex
Orme, Rt Hon Stanley


Eastham, Ken
Park, George


Ellis, Raymond
Parry, Robert


Evans, John (St. Helens N)
Patchett, Terry


Ewing, Harry
Pavitt, Laurie


Fatchett, Derek
Penhaligon, David


Fields, T. (L'pool Broad Gn)
Pike, Peter


Fisher, Mark
Prescott, John


Flannery, Martin
Randall, Stuart


Foot, Rt Hon Michael
Redmond, M.


Forrester, John
Rees, Rt Hon M, (Leeds S)


Foster, Derek
Richardson, Ms Jo


Foulkes, George
Roberts, Allan (Bootle)


Fraser, J. (Norwood)
Roberts, Ernest (Hackney N)


Freeson, Rt Hon Reginald
Robertson, George


Freud, Clement
Robinson, G. (Coventry NW)


Garrett, W. E.
Rogers, Allan


George, Bruce
Rowlands, Ted


Gilbert, Rt Hon Dr John
Sheerman, Barry


Godman, Dr Norman
Sheldon, Rt Hon R.


Golding, John
Shore, Rt Hon Peter






Short, Ms Clare (Ladywood)
Tinn, James


Short, Mrs R. (W'hampt'n NE)
Torney, Tom


Skinner, Dennis
Wardell, Gareth (Gower)


Smith, C. (Isl'ton S &amp; F'bury)
Wareing, Robert


Smith, Cyril (Rochdale)
Welsh, Michael


Snape, Peter
Wigley, Dafydd


Soley, Clive
Williams, Rt Hon A.


Spearing, Nigel
Winnick, David


Steel, Rt Hon David
Woodall, Alec


Stott, Roger
Young, David (Bolton SE)


Strang, Gavin



Straw, Jack
Tellers for the Noes:


Thomas, Dafydd (Merioneth)
Dr. Roger Thomas and


Thompson, J. (Wansbeck)
Mr. Austin Mitchell.


Thorne, Stan (Preston)

Question accordingly agreed to.

Resolved
That, for the purposes of any Act resulting from the Transport Bill, it is expedient to authorise the extinguishment of liabilities of the National Bus Company in respect of sums lent to it under section 20 of the Transport Act 1962 and the payment out of money provided by Parliament of —
(a) any expenditure of the Secretary of State —

(i) in connection with the dissolution of the National Bus Company;
(ii) in respect of the salaries or remuneration of traffic commissioners and persons acting as their officers and servants;
(iii) in respect of the remuneration of members of the Transport Tribunal and the other expenses of the tribunal;
(iv) in making grants to persons operating or proposing to operate public passenger transport services in rural areas in Great Britain; and
(v) in making grants to the British Railways Board in respect of their costs in securing the provision of bus substitution services;

(b) any increase in payments out of money so provided arising from any increase in administrative expenses of the Secretary of State attributable to the provisions of that Act; and
(c) any increase in payments out of money so provided under any other enactment.

WAYS AND MEANS

Transport

Motion made, and Question proposed,
That any Act resulting from the Transport Bill ("the Transport Act") may provide —

(a) that section 16(1)(a) of the Finance Act 1970 (which excludes precept income and grants in computing the profits of a Passenger Transport Executive chargeable to corporation tax) shall not apply with respect to any accounting period beginning on or after the passing of the Transport Act;
(b) that, in computing for the purposes of the Corporation Tax Acts the profit or loss of a Passenger Transport Executive for any accounting period beginning on or after the passing of the Transport Act, the loss of any earlier accounting period shall be computed as if section 16(1)(a) of the Finance Act 1970 had not been enacted; and
(c) for the payment of sums into the Consolidated Fund and for increased payments into the Consolidated Fund under any other enactment.—[Mr. Garel-Jones.]

Mr. Jim Craigen: I shall not detain the House for long. That is not a promise to the Secretary of State but a threat, because we expect him to answer quite a number of questions which were not dealt with earlier on Second Reading. If the Secretary of State does not give those matters attention now, I assure him that the debate could well exceed three hours.
The ways and means resolution is rather tightly drawn but touches on several major and important issues. The first is the level of fares with the implications of clause 105 which cuts tax relief resulting from section 16(1)(a) of the Finance Act 1970. Other important issues concern the assets and disposal of the National Bus Company. The Secretary of State touched on that this afternoon in terms of the outstanding debt, but we should like to know more about how the NBC will be broken up and disposed of for sale. Thirdly, the resolution affects the break-up of the passenger transport executives. Again there are considerable implications for various parts of the United Kingdom, not least Strathclyde. It is important that the Secretary of State should give more details to the House about the effects that that will have.
The provisions seem to suggest that the Secretary of State is more interested in helping the Treasury than the travelling public. The cost of transport will increase, notwithstanding the introduction of more competition and privatisation. When comments were made earlier about the availability of bus transport, I thought that the remarks of the late R. A. Butler were apt. He said that those who miss the bus must resign themselves to walking. In many areas the travelling public will have no choice.
What is the effect of clause 105(1), which makes provision to cut tax relief? If it is removed, there will clearly be an extra charge. When the Minister replies, will he tell us what that will cost? The Government have made a great deal of the importance of rate-capping legislation. It is important that the Minister tells us how the Government will keep down bus fares, which have a considerable effect on the social and economic life of the country. My hon. Friend the Member for Glasgow, Shettleston (Mr. Marshall) spoke earlier about dependence on public transport, which exists in areas such as


Strathclyde and especially in Glasgow, where 70 per cent. of households have no car. It is essential that the Minister clarifies those arrangements.
Under clause 51, the Secretary of State will have powers to extinguish past loans to the NBC, and to use the proceeds of sales to repay debts. The Government have been singularly unsuccessful so far in their attempts to push parts of the NBC into the private sector. It will be useful if the Minister tells us what restructuring lies ahead. As a Scotsman, I am bound to say that listening to some comments made by English colleagues, there could be a not inconsiderable change in many parts of the country.
Moreover, it would be useful to know what is meant by the maximisation of the proceeds to the Treasury. It is the Chancellor of the Exchequer rather than the consumer who will benefit from the sale of the assets of the National Bus Company. I understand that the NBC board will be required to submit a disposal programme to the Department of Transport. I wonder whether the Secretary of State would enlighten the House as to what discussions have taken place so far, and how he sees the hara-kiri ahead in terms of the dismemberment of the National Bus Company.
The Secretary of State might also comment on what will happen with the break-up of the passenger transport executives. The shattering of the structures, which is ostensibly intended to assist the travelling public in those PTE areas, carries with it an ominous message of higher fares and redundancies, and a worse service in many communities. I want a little more information from the Secretary of State on that, and on what will happen to the money from fees and fines that is received by the traffic commissioners.
Earlier this evening, the Under-Secretary of State gave us elocution lessons and referred to "Pygmalion", but as he was talking what came to mind was the word "chameleon". I listened to the speeches of some Conservative Members, and although in principle they had some good things to say about the Bill, they always had qualifications. They always asked the Secretary of State to protect this, or reimburse that. It did not surprise me that not one Scottish Tory Back-Bench Member had a good word to say about the Bill, because not one of them spoke in the debate, and precious few of them were here this afternoon.

Mr. Tristan Garel-Jones: Yes they were.

Mr. Craigen: The Whip obviously does not know all the Scottish Back-Bench Members, or he would not have made that statement.
I know the Secretary of State only too well, and he may recall that in a previous incarnation, when he was Minister of State at the Foreign and Commonwealth Office, he was planning to sent me on a long boat trip to St. Helena to carry out an employment exercise. However, it was impossible to go there because of the poor boat service. This afternoon, when he was telling the bus industry that its motto should be "Take a bus", I thought that the Secretary of State was taking the House for a ride. The Bill will not do much for the travelling public — [Interruption.] It did not surprise me when I read the appendix — I hope that the hon. Member for Mid-Worcestershire (Mr. Forth), who I believe comes from Glasgow, also read the appendix—that the Department of Transport had to search for information in Australia to

prove its case on the privatisation of buses. Page 61—I am sure the hon. Gentleman knows it chapter and verse —states:
While there is no direct UK evidence, some guidance can be obtained by considering a study of private urban bus operators in Australia, in towns where they accounted for 46 per cent. of buses in use.
I do not know whether the Department had to go to Alice Springs to obtain the information that the Department believes will be relevant to the running of bus services of the United Kingdom, but when I looked at the serried ranks on the Government Back Benches, I thought, "There cannot be a body of men and women who know less about travelling on buses than that lot over there." The Scottish Office Minister who is responsible for buses travelled recently on a bus. He did so only because the convener of Lothian regional council had been chasing him all over the place saying that the Bill would be disastrous for Lothian regional transport.
The Secretary of State must address himself to these significant points, or we shall keep him here for quite a long time, although not for quite so long a time as he was going to send me to St. Helena. However, we shall expect the kind of answers that he did not give the travelling public this afternoon when he introduced the Bill.

The Secretary of State for Transport (Mr. Nicholas Ridley): I am delighted to try to assist the hon. Member for Glasgow, Maryhill (Mr. Craigen) by answering some of his questions. I may find it easier than I did on the previous money resolution when I believe I had four minutes in which to answer the points made by a number of hon. Members.
First, the hon. Gentleman asked about clause 105, which contains the tax provisions that are being effected in relation to the passenger transport executives. The clause does three things. First, it removes the exemptions which the PTEs currently enjoy whereby the income which the PTEs receive from the passenger transport authorities is excluded in computing the profits of the PTEs for corporation tax purposes. As they were two public bodies, the grants from PTAs to PTEs were not treated as income and taxable in the hands of PTEs. When they become arm's length companies and normal commercial rules apply, any income they receive—the hon. Member for Crewe and Nantwich (Mrs. Dunwoody) will be steeped in the fact that it will only be income received through the tendering process and not through direct subsidy—will be part of income, and if they make a profit their profits will be subject to corporation tax, just like those of any other company.
Secondly, clause 105 removes the accumulated tax losses which have resulted in the past from this exemption. We had the example of south Yorkshire in the previous debate which is now receiving £69 million a year from the PTA. That is an accumulated tax loss of £69 million a year. Perhaps by now it is hundreds of millions of pounds just for one metropolitan county. There would be little merit in allowing these tax losses to pass into the period when the PTEs become companies because they could be of value to them in making money by completely extraneous purposes, as there has been a tendency to happen already.
Thirdly, it prevents the liabilities for capital gains tax and development land tax from arising on transactions


which are to be brought about by the provisions in the Bill and which involve no significant change in ownership. Just because a PTE becomes a company, it will not in any sense be liable for capital gains or development land tax. Those provisions make the position entirely fair both as regards the transition and as between the PTE companies and private sector companies when they are competing with one another in the open market.
Secondly, the hon. Gentleman asked me for details of the break-up of the National Bus Company. I have written to the board of the National Bus Company asking it to prepare a number of options which will have to bear in mind the need for obtaining competitiveness and at the same time the possibilities for sale and the lively proceeds of sale as well as the management of the company in the meanwhile.

Mrs. Gwyneth Dunwoody: Will the right hon. Gentleman also bear in mind the viability and the size of the units? Will this be an element, or is he simply intent on forcing them into the private sector without regard to whether the companies concerned are viable units?

Mr. Ridley: The hon. Lady may have misheard me. I said that I asked the National Bus Company to work out options—three, four, five, two, one; I do not know how many—which it believes will meet the criteria which I put in my letter to the company. One of those criteria is competition; another is the return to the Exchequer; a third is the ability to manage. The hon. Lady will find it all in Hansard. If a company is to be saleable, it must be viable. Nobody will buy a company if it is not thought to be viable.
The hon. Member for Maryhill also asked about the maximisation of proceeds from the sale of the National Bus Company subsidiaries. This will be very much part of the consideration in deciding between the options. As I said on a previous occasion, I am not certain that the National Bus Company is saleable as an entity. I suspect that we will get a different type of offer by selling it in smaller units. I hope that offers will come from managers and employees working on employee buy-out schemes, as happened with the National Freight Corporation.

Mr. Craigen: Does that mean that when the Minister is taking a decision it will be the highest return to the Treasury rather than the greatest service to the local community that will be the deciding factor?

Mr. Ridley: Both the letter which I wrote to the chairman of the National Bus Company and the priorities in the clause in the Bill, which he should read carefully, set out that the prime consideration is that a competitive situation should result from the sale of the assets so that when the National Bus Company subsidiaries are sold they are neither too dominant nor too small to be able to compete with the private sector, the PTEs and the municipal undertakings. That is the prime consideration.

Mr. Craigen: That does not answer the question.

Mr. Ridley: It answers the question entirely. The main priority in the sale of the subsidiaries will be competition. It is clearly set out in the Bill.
The hon. Gentleman asked about the PTEs. He will notice that the first priority in the Bill is that the PTE bus

operations should be put into an arm's length state as separate companies. If a PTE is thought to be too large and dominant to make for proper competition, there is power in the Bill for me to ask it to put forward a scheme to break up the operation into smaller units. It does not follow that in all cases or in any case we will do that. It will depend on the competitive situation which will result from the making of the companies. Some PTEs may want to do that of their own volition; some may not.

Mr. Peter Fry: I am most interested in what my right hon. Friend has said. Is he aware that there are more than 3,000 buses in Manchester? Is it not right to give an indication to the House that there will not be in Greater Manchester one organisation with that large number of vehicles if he is to insist in all other parts of the country that units of the NBC or other PTEs will be split up? Is it not right to make it clear whether 3,000 will be too many? If he accepts it in Manchester, he should accept it elsewhere.

Mr. Ridley: We must first see whether Manchester PTE puts forward proposals to restructure its own operation which might well fit in with the criteria. Manchester may not do that, in which case we will indeed have to do as my hon. Friend suggests. I hardly think that it is right to design a new scheme for the Manchester PTE companies on the Ways and Means resolution, as it is not entirely relevant to whether we should pay money from these various operations into the Consolidated Fund.
The hon. Gentleman asked me what would happen to fees and fines raised by the traffic commissioners. The answer is that they will be paid into the Consolidated Fund.
The hon. Gentleman quoted the words of the late Lord Butler. "Those who miss the bus will have to walk". However, the situation has changed and now those who miss the bus will take the car. There is competition, and the bus service has to be able to win back that traffic. One way in which that will be done is the way about which he asked me—by keeping fares down. There are two ways to do that: first, by subsidy, which is how it is done in south Yorkshire; secondly, by competition. When subsidies are used, money has to be taken out of other people's pockets. When competition is used, the efficiency of the operators does it. That is what will happen to fares—they will come down. I commend the motion to the House.

Question put:—

The House divided: Ayes 236, Noes 167.

Division No 102]
[11.46 pm


AYES


Alexander, Richard
Best, Keith


Alison, Rt Hon Michael
Bonsor, Sir Nicholas


Amess, David
Boscawen, Hon Robert


Ancram, Michael
Bowden, A. (Brighton K'to'n)


Arnold, Tom
Bowden, Gerald (Dulwich)


Ashby, David
Bright, Graham


Aspinwall, Jack
Brinton, Tim


Atkins, Robert (South Ribble)
Brooke, Hon Peter


Atkinson, David (B'm'th E)
Brown, M. (Brigg &amp; Crthpes)


Baker, Rt Hon K. (Mole Vall'y)
Bryan, Sir Paul


Baker, Nicholas (N Dorset)
Buck, Sir Antony


Baldry, Tony
Budgen, Nick


Beaumont-Dark, Anthony
Bulmer, Esmond


Beggs, Roy
Burt, Alistair


Bellingham, Henry
Butler, Hon Adam


Bendall, Vivian
Butterfill, John


Benyon, William
Carlisle, John (N Luton)






Carlisle, Kenneth (Lincoln)
Hunter, Andrew


Carttiss, Michael
Jackson, Robert


Cash, William
Jenkin, Rt Hon Patrick


Chalker, Mrs Lynda
Jessel, Toby


Chapman, Sydney
Johnson Smith, Sir Geoffrey


Churchill, W. S.
Jones, Gwilym (Cardiff N)


Clark, Dr Michael (Rochford)
Jones, Robert (W Herts)


Clarke, Rt Hon K. (Rushcliffe)
Kellett-Bowman, Mrs Elaine


Cockeram, Eric
Key, Robert


Colvin, Michael
King, Roger (B'ham N'field)


Conway, Derek
Knight, Gregory (Derby N)


Coombs, Simon
Knight, Mrs Jill (Edgbaston)


Cope, John
Knowles, Michael


Cranborne, Viscount
Knox, David


Crouch, David
Lamont, Norman


Currie, Mrs Edwina
Lang, Ian


Dickens, Geoffrey
Latham, Michael


Dicks, Terry
Lawler, Geoffrey


Dorrell, Stephen
Lawrence, Ivan


Douglas-Hamilton, Lord J.
Leigh, Edward (Gainsbor'gh)


Dover, Den
Lennox-Boyd, Hon Mark


du Cann, Rt Hon Sir Edward
Lilley, Peter


Dunn, Robert
Lloyd, Ian (Havant)


Durant, Tony
Luce, Richard


Dykes, Hugh
McCrindle, Robert


Eggar, Tim
McCurley, Mrs Anna


Emery, Sir Peter
MacGregor, John


Evennett, David
MacKay, John (Argyll &amp; Bute)


Fairbairn, Nicholas
Maclean, David John


Farr, Sir John
Maginnis, Ken


Favell, Anthony
Major, John


Fenner, Mrs Peggy
Malone, Gerald


Forman, Nigel
Mather, Carol


Forsyth, Michael (Stirling)
Mayhew, Sir Patrick


Forth, Eric
Mellor, David


Fowler, Rt Hon Norman
Merchant, Piers


Fox, Marcus
Mitchell, David (NW Hants)


Franks, Cecil
Morris, M. (N'hampton, S)


Fraser, Peter (Angus East)
Moynihan, Hon C.


Freeman, Roger
Neale, Gerrard


Fry, Peter
Needham, Richard


Galley, Roy
Nelson, Anthony


Garel-Jones, Tristan
Newton, Tony


Gorst, John
Nicholls, Patrick


Gow, Ian
Norris, Steven


Gower, Sir Raymond
Onslow, Cranley


Grant, Sir Anthony
Ottaway, Richard


Greenway, Harry
Page, Sir John (Harrow W)


Gregory, Conal
Patten, John (Oxford)


Griffiths, Peter (Portsm'th N)
Peacock, Mrs Elizabeth


Ground, Patrick
Pollock, Alexander


Gummer, John Selwyn
Powley, John


Hamilton, Hon A. (Epsom)
Renton, Tim


Hamilton, Neil (Tatton)
Ridley, Rt Hon Nicholas


Hampson, Dr Keith
Roberts, Wyn (Conwy)


Hannam, John
Robinson, Mark (N'port W)


Hargreaves, Kenneth
Roe, Mrs Marion


Harris, David
Rossi, Sir Hugh


Harvey, Robert
Rowe, Andrew


Havers, Rt Hon Sir Michael
Rumbold, Mrs Angela


Hawkins, C. (High Peak)
Ryder, Richard


Hawkins, Sir Paul (SW N'folk)
Sainsbury, Hon Timothy


Hawksley, Warren
Sayeed, Jonathan


Hayes, J.
Shaw, Giles (Pudsey)


Hayhoe, Barney
Shaw, Sir Michael (Scarb')


Hayward, Robert
Shelton, William (Streatham)


Henderson, Barry
Shepherd, Colin (Hereford)


Hickmet, Richard
Shepherd, Richard (Aldridge)


Higgins, Rt Hon Terence L.
Shersby, Michael


Hill, James
Silvester, Fred


Hind, Kenneth
Skeet, T. H. H.


Hogg, Hon Douglas (Gr'th'm)
Smith, Sir Dudley (Warwick)


Holt, Richard
Smith, Tim (Beaconsfield)


Hordern, Peter
Soames, Hon Nicholas


Howard, Michael
Speed, Keith


Howarth, Alan (Stratf'd-on-A)
Spence, John


Howarth, Gerald (Cannock)
Spencer, Derek


Howell, Rt Hon D. (G'ldford)
Spicer, Michael (S Worcs)


Howell, Ralph (N Norfolk)
Squire, Robin


Hubbard-Miles, Peter
Stanbrook, Ivor





Steen, Anthony
Waldegrave, Hon William


Stem, Michael
Walker, Cecil (Belfast N)


Stevens, Lewis (Nuneaton)
Wall, Sir Patrick


Stevens, Martin (Fulham)
Waller, Gary


Stewart, Allan (Eastwood)
Wardle, C. (Bexhill)


Stewart, Andrew (Sherwood)
Warren, Kenneth


Stokes, John
Watson, John


Stradling Thomas, J.
Watts, John


Sumberg, David
Wells, Sir John (Maidstone)


Taylor, John (Solihull)
Whitfield, John


Taylor, Teddy (S'end E)
Whitney, Raymond


Temple-Morris, Peter
Wiggin, Jerry


Thompson, Donald (Calder V)
Wilkinson, John


Thompson, Patrick (N'ich N)
Wolfson, Mark


Thornton, Malcolm
Wood, Timothy


Townend, John (Bridlington)
Woodcock, Michael


Tracey, Richard
Yeo, Tim


Trippier, David
Young, Sir George (Acton)


Twinn, Dr Ian
Younger, Rt Hon George


van Straubenzee, Sir W.



Vaughan, Sir Gerard
Tellers for the Ayes:


Viggers, Peter
Mr. Peter Lloyd and


Waddington, David
Mr. Michael Neubert.




NOES


Adams, Allen (Paisley N)
Eastham, Ken


Alton, David
Evans, John (St. Helens N)


Anderson, Donald
Ewing, Harry


Ashdown, Paddy
Fatchett, Derek


Ashton, Joe
Fields, T. (L'pool Broad Gn)


Atkinson, N. (Tottenham)
Fisher, Mark


Bagier, Gordon A. T.
Flannery, Martin


Banks, Tony (Newham NW)
Foot, Rt Hon Michael


Barnett, Guy
Forrester, John


Barron, Kevin
Foster, Derek


Beckett, Mrs Margaret
Foulkes, George


Beith, A. J.
Fraser, J. (Norwood)


Bennett, A. (Dent'n &amp; Red'sh)
Freeson, Rt Hon Reginald


Bidwell, Sydney
Freud, Clement


Blair, Anthony
Garrett, W. E.


Boothroyd, Miss Betty
George, Bruce


Boyes, Roland
Gilbert, Rt Hon Dr John


Bray, Dr Jeremy
Godman, Dr Norman


Brown, Gordon (D'f'mline E)
Golding, John


Brown, Hugh D. (Provan)
Hamilton, James (M'well N)


Brown, N. (N'c'tle-u-Tyne E)
Hamilton, W. W. (Central Fife)


Brown, Ron (E'burgh, Leith)
Hancock, Mr. Michael


Bruce, Malcolm
Hardy, Peter


Buchan, Norman
Harman, Ms Harriet


Caborn, Richard
Harrison, Rt Hon Walter


Callaghan, Jim (Heyw'd &amp; M)
Haynes, Frank


Campbell-Savours, Dale
Heffer, Eric S,


Carlile, Alexander (Montg'y)
Hogg, N. (C'nauld &amp; Kilsyth)


Clark, Dr David (S Shields)
Holland, Stuart (Vauxhall)


Clarke, Thomas
Home Robertson, John


Clay, Robert
Howells, Geraint


Clwyd, Mrs Ann
Hughes, Robert (Aberdeen N)


Cocks, Rt Hon M. (Bristol S.)
Hughes, Roy (Newport East)


Cohen, Harry
Hughes, Simon (Southward)


Concannon, Rt Hon J. D.
John, Brynmor


Conlan, Bernard
Jones, Barry (Alyn &amp; Deeside)


Cook, Frank (Stockton North)
Kaufman, Rt Hon Gerald


Cook, Robin F. (Livingston)
Kennedy, Charles


Corbyn, Jeremy
Kirkwood, Archy


Cowans, Harry
Lamond, James


Cox, Thomas (Tooting)
Leadbitter, Ted


Craigen, J. M.
Leighton, Ronald


Crowther, Stan
Lewis, Ron (Carlisle)


Cunliffe, Lawrence
Lewis, Terence (Worsley)


Cunningham, Dr John
Litherland, Robert


Dalyell, Tarn
Lloyd, Tony (Stretford)


Davies, Ronald (Caerphilly)
Lofthouse, Geoffrey


Davis, Terry (B'ham, H'ge H'l)
Loyden, Edward


Deakins, Eric
McDonald, Dr Oonagh


Dewar, Donald
McGuire, Michael


Dormand, Jack
McKay, Allen (Penistone)


Dubs, Alfred
McKelvey, William


Duffy, A. E. P.
McNamara, Kevin


Dunwoody, Hon Mrs G.
McTaggart, Robert


Eadie, Alex
McWilliam, John






Madden, Max
Rowlands, Ted


Marek, Dr John
Sheerman, Barry


Marshall, David (Shettleston)
Shore, Rt Hon Peter


Maxton, John
Short, Ms Clare (Ladywood)


Maynard, Miss Joan
Short, Mrs R(W'hampt'n NE)


Meacher, Michael
Skinner, Dennis


Meadowcroft, Michael
Smith, C. Isl'ton S &amp; F'bury)


Michie, William
Smith, Cyril (Rochdale)


Mikardo, Ian
Snape, Peter


Millan, Rt Hon Bruce
Soley, Clive


Miller, Dr M. S. (E Kilbride)
Spearing, Nigel


Morris, Rt Hon J. (Aberavon)
Steel, Rt Hon David


Nellist, David
Stott, Roger


O'Brien, William
Strang, Gavin


O'Neill, Martin
Straw, Jack


Orme, Rt Hon Stanley
Thomas, Dr R. (Carmarthen)


Park, George
Thompson, J. (Wansbeck)


Parry, Robert
Thorne, Stan (Preston)


Patchett, Terry
Tinn, James


Penhaligon, David
Warden, Gareth (Gower)


Pike, Peter
Wareing, Robert


Prescott, John
Welsh, Michael


Randall, Stuart
Williams, Rt Hon A.


Redmond, M.
Winnick, David


Rees, Rt Hon M. (Leeds S)
Woodall, Alec


Richardson, Ms Jo
Young, David (Bolton SE)


Roberts, Allan (Bootle)



Roberts, Ernest (Hackney N)
Tellers for the Noes:


Robertson, George
Mr. Don Dixon and


Robinson, G. (Coventry NW)
Mr. Sean Hughes.


Rogers, Allan

Question accordingly agreed to

Resolved,
That any Act resulting from the Transport Bill ("the Transport Act") may provide—

(a) that section 16(1)(a) of the Finance Act 1970 (which excludes precept income and grants in computing the profits of a Passenger Transport Executive chargeable to corporation tax) shall not apply with respect to any accounting period beginning on or after the passing of the Transport Act;
(b) that, in computing for the purposes of the Corporation Tax Acts the profit or loss of a Passenger Transport Executive for any accounting period beginning on or after the passing of the Transport Act, the loss of any earlier accounting period shall be computed as if section 16(1)(a) of the Finance Act 1970 had not been enacted; and
(c)for the payment of sums into the Consolidated Fund and for increased payments into the Consolidated Fund under any other enactment

London Regional Transport (Levy)

The Minister of State, Department of Transport (Mrs. Lynda Chalker): I beg to move,
That the draft London Regional Transport (Levy) Order 1985, which was laid before this House on 17 December, be approved.
I think I should first explain to the House some of the detail of this draft levy order.
London's ratepayers are being asked to contribute £212 million towards the estimated grants to LRT of £323 million for the financial year 1985–86. Two hundred and twelve million pounds is equivalent to a rate of 10·8p. Of course, those who get a rate rebate also get a rebate on this amount.
The Government's approach is certainly in stark contrast to that of London Transport's old masters. They thought that by taking more and more money from the ratepayer they could conceal from passengers the rising real costs of providing public transport services in London. Between 1970 and 1983, the total grant from taxpayers and ratepayers rose from £6.5 million to £400 million, including the concessionary fare grants. Despite this, fares were over 30 per cent. higher in real terms after the GLC's last fares change in May 1983 than they were at the beginning of 1970, when the GLC was first given responsibility for London Transport.
The first step that we took on taking control of London Regional Transport last summer was to signal an end to the upward spiral of costs and subsidies, and we made an early start. On 20 July, three weeks after LRT came under Government control, my right hon. Friend the Secretary of State wrote to the chairman of LRT setting out clear objectives for the next few years. He made it clear that there had to be a limit on the amount of public resources under the transport system but within the total available there should be a substantial shift away from revenue subsidy into productive capital investment, to enable lasting improvements in public transport facilities to be made and to make the system more efficient.
Accordingly, my right hon. Friend set two specific targets for LRT. The first target was to reduce unit costs by at least 2·5 per cent. a year in real terms and, secondly, to reduce the level of revenue support required from £190 million in 1984–85 to £95 million cash in 1987–88. This is less than 40 per cent. of the level of revenue support proposed by the GLC under its plan for 1987–88. At the same time, we made it clear that the Government were prepared to provide for a substantial programme of capital investment to save costs and improve facilities for passengers, including the interchanges between modes.
I am pleased to acknowledge the progress which LRT management has already made under Keith Bright in transforming the outlook for LRT. LRT's annual business plan for 1985–86 makes encouraging reading. I know that some Opposition Members will be disappointed, because they like to claim that efficiency improvements are a pipe dream and that passengers will have to pay a heavy price if subsidies are reduced. However, the annual business plan utterly refutes this defeatist attitude and I recommend it to any hon. Member who wants to know what is now going on.
Instead of the swingeing fares increases which we were accused of plotting, LRT has raised fares by 9 per cent. on average from 6 January. That 9 per cent. puts it back


to the same level in real terms as in May 1983 after the GLC's last fares changes. In fact, fares are 10 per cent. lower now than they were in 1981, when the present GLC took office. LRT has introduced the new Capitalcard which extends the benefits of the very popular LT Travelcard to include British Rail's services in the London area.
Hon. Members who have studied the annual business plan will be aware that there are encouraging developments in passenger services. London Regional Transport has improved bus service reliability in 1984–85 and hopes to achieve further improvements in the coming year. As a result, it forecasts that average waiting times will show some improvement in 1985–86 despite a slight reduction in total bus mileage and that service levels will still be substantially above the proposals in LT's 1983 plan.
In his introduction to the business plan, the chairman of LRT states:
Total public transport mileage by road in London might, in fact, increase if demand can be stimulated by the development of new routes and different kinds of services, operated by London buses or other operators under contract to LRT.
So the future has some bright prospects, with good management.
A slight increase in total operated mileage is forecast for the underground system. The Heathrow terminal 4 extension is scheduled to open towards the end of 1985. There are no proposals for station or line closures and LRT plans to continue with its ambitious programme of station modernisation.

Mr. Eric Deakins: The move towards one-person operated buses has been much greater under LRT than under the GLC. Will this not adversely affect the reliability of bus services for passengers, on the ground that these buses take longer to complete their journeys for the obvious reason that there is only one person to handle the operation and not two?

Mrs. Chalker: From the information that I have to hand from different places round the country, some of which already have 100 per cent. one-person operation, I do not find that to be true. I do not have any information to that effect; if I did, I would tell the hon. Member. If I discover any information, I will let him know.
The one-person operated buses, once people are used to the operation, do not have the same hold-ups as are involved in getting both members of the crew to start off or the purely operational problems that sometimes occur with a conductor and a driver as opposed to one person doing the entire job.
LRT's annual business plan shows that it has made a good start towards better services for less subsidy. It has managed to reduce the revenue support requirement from £190 million this year under the GLC to about £130 million for 1985–86, a reduction of nearly one third, but without a large increase in fares or major cuts in services. This achievement is attributable partly to the continuing success of its marketing policies, especially Travelcard. But a key factor is the improving efficiency. LRT now expects to exceed its budgeted unit cost reduction target this year by a wide margin as a result of the initiatives agreed by the new board to improve productivity across the whole range of LRT's operations. In 1985–86, it expects to reduce unit costs by a further 2·8 per cent., which is significantly better than the target of 2·5 per cent. which my right hon. Friend has set.
This progress has enabled LRT to achieve a dramatic switch of resources into worthwhile capital investment, which I believe all hon. Members should welcome. Examples include the modernisation of bus and rail engineering facilities, increasing automation of ticket sales and collection on the underground and progressive conversion of the bus and train fleets to one-person operation, as the hon. Member for Walthamstow (Mr. Deakins) mentioned. In addition, nearly one third of underground investment for 1985–86 will be devoted to an expanding station modernisation programme.
In sum, LRT's plan shows that in 1985–86 it will have made a good start on the way towards better services for less subsidy. It is odd then, even if predictable, that the latest message from across the river is that ratepayers will be worse off financially under the new arrangements. It is worth my taking a few minutes to examine the credentials of that claim.
It was of course the GLC's high-spending policies which led to it receiving no block grant in 1984–85, so the only contribution from the taxpayer towards the GLC's grants to London Transport came by way of the transport supplementary grant. On a pro rata apportionment of the transport supplementary grant between the various items of accepted expenditure, the GLC received under £80 million of transport supplementary grant this year towards the total budgeted to London Transport of £340 million. Over three quarters of the GLC's grants, therefore, fell to be met by ratepayers in the financial year 1984–85. By contrast, the levy order before the House for 1985–86, which I ask hon. Members to approve, provides for a rate payers' contribution of less than two thirds, and the total grant has been reduced from £340 million to £323 million. I ask any hon. Member who is good with a pencil and paper or a calculator at this hour: how can two thirds of £323 million be more than three quarters of £340 million? Hon. Members may well ask. The answer is that, from across the river we have had a new form of maths—I dare not call it new maths, because that would be unfair to new maths—by which it seeks to prove its figures.
Until just over a year ago, the GLC was funding capital investment by LRT on a pay-as-you-go basis. This is a method appropriate for investment which is unlikely to generate sufficient profits to cover even borrowing charges. On this basis, the share of the GLC's budget for London Transport this year, which was not covered by Government grants was £263 million—£50 million, or some 2½p in the pound more than the Government's proposed levy for 1985–86.
Because that shows the GLC's policies in a bad light, the GLC has been desperately trying to demonstrate that it has borrowed to finance LT's capital grants. In order to provide some basis for that claim, the GLC switched an arbitrary £300 million of external debt from housing to public transport in December 1983, when the London Regional Transport Bill was at Second Reading stage in this House. Hon. Members will not be fooled by this ruse; nor will ratepayers. To make it worse, not only does the GLC claim that it has kept its rates down by spreading the costs of its policies over future years; at the same time it seeks to blame the Government for the £70 million of debt charges that are now attributed to public transport as a result of its own transfer of that £300 million from housing to public transport. I am not surprised that that is happening, but we will not have the wool pulled over our


eyes or over ratepayers' eyes. I must say, accustomed as I am to the sort of stories which are cooked up in county hall, that that one really takes some beating.

Mr. Tony Banks: I want to understand the Minister. I do not want to be a party to dealing in false figures. Will she tell the House whether the debt charges of £69 million are debt charges on previous London Transport borrowing? In cash terms, how many million pounds are being contributed by ratepayers to London Regional Transport?

Mrs. Chalker: The answer to the first question is no, and to the second is the figure that I have already mentioned—£212 million of grant, almost two thirds of the total of £323 million.

Mr. Simon Hughes: We can become blinded by figures. The Minister could helpfully tell the House what percentage in the coming year of total money spent on LRT will come from the ratepayer, as opposed to the current year, which, subject to certain alterations, is under the control of the GLC. It is always the proportion between rate contribution and central taxpayers' contribution that people can most easily perceive, rather than the figures given by the Minister.

Mrs. Chalker: I shall return to the figures when I reply to the debate, but off the top of my head I believe them to be 65·6 per cent. and 75 per cent.
In closing my remarks, I need do no more than draw the attention of the House to the GLC's policy to increase the revenue subsidy for LT alone to £245 million by 1987–88 — more than two and half times the level proposed by the Government. In contrast, our policies, which have already begun to deliver substantial savings for London ratepayers in the first few months of LRT are beginning to bear fruit. The outlook is that those savings will increase. Furthermore, our approach, with the backing of the LRT management, will bring very substantial benefits for the whole community in terms of improved services and facilities for less money. That is a far cry from the decay and neglect that was predicted by our opponents following the Government's takeover of LRT. The prospects for London's public transport system, those who use the popular Capitalcard and those who pay for it through the rate levy order have never been better. I commend the draft order to the House.

Mrs. Gwyneth Dunwoody: It is a disgrace that a major order, which is putting an extra cost on to London ratepayers, should be taken at this hour of the morning. The Government are perfectly well aware that such a measure will be unpopular and they are anxious that it should not receive too much publicity.
It is enlightening that the Secretary of State has not moved the order. I notice that that task has now been downgraded to the province of Minister of State — I have no desire to be rude to the hon. Lady—whereas before the right hon. Gentleman was at least prepared to come here and wave his arms about in an attempt to defend some of the decisions that he has taken.
It is clear that there is a basic inconsistency in the right hon. Gentleman's political ethos. We have just spent one parliamentary day debating the fact that the right hon.
Gentleman wishes to set free the transport system throughout the rest of the United Kingdom, yet now he is operating in a completely different way in relation to London Regional Transport.
The right hon. Gentleman got himself into this situation because he levied an amount on the GLC, which, according to the judge who tried the case, was illegal and irresponsible. He is now anxious that we should push forward this levy tonight because as soon as the London ratepayers suddenly realise how much they have been conned they will add to the voices raised in the House not only against the abolition of the GLC but against the arbitrary way in which the right hon. Gentleman has now taken London transport into his pocket to run like some personal little train set round and round his office table.
I am perfectly prepared to stand here tonight and bandy the most complicated statistics with the Minister of State if she seriously thinks that that will in any way enlighten ratepayers. It is frightening that Conservative Members should come here at the behest of the Secretary of State, who has been found guilty of asking for more money than he legally has a right to, and then talk to us about creative accounting. We are told that the GLC has been fixing the figures because it has used creative accounting to shift through an entire book-keeping operation, money out of one vote and into another and that that is why LRT is faced with such difficulties. That is nonsense and the Minister of State knows that.
The purpose of the order is to levy a 10·8p precept on London boroughs to pay for part of the cost of financing public transport in London. As long as that is realised, and as long as we have a little plain talking so that we do not pretend that somehow or other some magic accounting procedure has left LRT with debts which it did not expect and was not supposed to hold, we shall get somewhere near talking about the reality behind this levy.
We are told by the Minister that the Government are charging far less than happened under the GLC. That is not the way the ratepayers of London will see it. They will see it in a much simpler way. They believe that the 9 per cent. rise in fares that has taken place since the LRT took over is an extra imposition. They believe that not only the increase in the levy but the clear sign that some of the ways in which the payment is operating across the capital are manifestly unfair, since the outer areas are not contributing the proper percentage of the moneys, and are worse than the situation that existed under the previous London Transport. They do not intend to be in some way persuaded that they are getting a much better system and that, although they will have to pay more and have worse services, that is part of some cloud of misunderstanding on their part, a miasma created by the wicked people across the river in the GLC.
The Minister has come here late at night to levy on Londoners a tax for a transport system run not by elected councillors—not by those over whom they have some control — and not even by those who pretend to demonstrate a certain expertise, but by a quango that will decide not only the rate of fares and developments but the effect on staffing and services.
Does the Minister really believe that the people of London do not understand that? They may not be expert at creative accounting. They may not have the right Etonian-type accents when they complain about the removal of services which they desperately need. But one fact they understand clearly. While the Secretary of State


says that the rest of the United Kingdom must have competition, he wants London's services to be run by a quango, which he controls from Whitehall. What is worse, he wants to charge the ratepayers of London more for the privilege of having their services run by one of the most ill-informed Secretaries of State for Transport that this country has had or is likely to have.

Mr. Tony Banks: I have sat through many debates at county hall when the budget has been under discussion. Compared with those debates, it is a travesty tonight to witness the way in which matters affecting the services and costs of London transport are being decided.
Throughout our deliberations on the London Regional Transport Bill, we were continually told by Ministers that the democratic accountablility of LRT would be assured through the means of the debate on the levy order. We are now undertaking that exercise, but it is a miserable replacement for the GLC's lengthy debates of all matters concerning London transport.
It was not a question of Tory members of the GLC bandying statistics before the transport committee. Papers were circulated and the figures were worked out. All the necessary information was available for all to see, and, what is more, the opposition could move amendments, whereas we are faced with an unamendable order and we have one and half miserable, rotten, stinking hours in which to debate it at gone midnight.
Who is here to discuss it? At the GLC there was a great deal of press interest in the lively debates about the future levels of London Transport services and fares. In the Chamber tonight we have perhaps a dozen hon. Members who represent London constituencies. I am not suggesting that this side of the House is any better than the Government side in that respect.
It is clear that hon. Members have become so fed up to the back teeth with being dragged into the day-to-day running of local government that they are voting with their feet, staying in the bars and disappearing into the night, leaving a few of us to debate issues for which we should have no responsibility and about which few of us have real knowledge.
There is no point in quoting many statistics, and I assure the Minister that I am not trying to score cheap points, but when she replies to the debate, will she explain how my information is incorrect, if it is? My figures, coming from county hall, do not accord with her statistics, coming from her advisers. I understand that this precept represents a 35 per cent. increase for London ratepayers. I will explain how I have arrived at that figure, and perhaps she will explain how I have got it wrong, if I have. Let us compare the 1984–85 transport budget with LRT's budget for 1985–86.
First, there was revenue support direct to London Transport of £190 million. Added to that were debt charges of £59 million, paid from the GLC precept, giving a sub-total of £249 million. To be deducted from that sub-total was £41 million received in the transport supplementary grant from central Government. Therefore, in 1984–85 the total burden on the London ratepayers was £208 million. I can gladly provide those figures; they are not secret. They were produced by the advisers to the GLC transport committee.
As the Minister correctly says, the total subsidy to London Regional Transport is £323 million. The hon. Lady also correctly says that the ratepayers will contribute £212 million of that through the LRT levy. That is already more than the £208 million that they paid last year, but one must add to it another £69 million for debt charges on previous London Transport borrowing, paid for through the GLC precept. Therefore, in 1985–86 the total burden on the ratepayers will be £281 million compared with £208 million in 1984–85, an increase of 35 per cent. Will the Minister please tell me, and the House, where my figures disagree with hers?
Why are the ratepayers of London being asked to pay that larger precept? The main reason is that Ministers have changed the way in which London Regional Transport pays for its capital spending. London Transport used to pay for capital expenditure by borrowing. That method was perfectly reasonable. It spread the cost of improvements over a number of years. London Regional Transport, on the other hand, is now required by Ministers to load the whole cost of capital equipment on to the year in which it is purchased. In 1985–86 there is a large hike in the cost to ratepayers consequent upon that change in policy.
The new policy makes neither good financial sense nor good economic sense. As in the case of water provision, the Government have asked for increased capital expenditure and they have also asked that all the expenditure should be financed in the year in which is incurred. That is a complete change from the way in which local authorities and nationalised industries have normally dealt with their own capital expenditure.
The new policy makes no sense, because future Governments might want substantially to increase the capital spending of London Regional Transport. If the present accounting system is maintained, London ratepayers will pay dearly for capital investment that will benefit subsequent generations of ratepayers as well as themselves.

Mr. Deakins: In the case of both water and public transport in London, is not the Government's aim to make a profit for themselves rather than to relieve the burden on the ratepayers?

Mr. Banks: The Government certainly appear now to be using charging in nationalised industries as a way of increasing indirect taxation. That is a dishonest and behind-the-scenes way of doing things.
One of the benefits to the, Government is that few people realise that the sleight of hand has taken place. When one is faced with a whole range of precepts and bills, it is difficult to work out what is going on. The Government are seeking to throw sand in the eyes of the ratepayers and taxpayers. In doing so they hope to get away with a massive switch from direct to indirect taxation. The ratepayers of London are being asked to pay more for a much worse service.
The Secretary of State has set several targets that will lead to a deterioration of services in London. There has been a proposed reduction in the level of revenue support from a budgeted £190 million by the GLC in 1984–85, to £95 million in cash terms by 1987–88, which is £82 million in 1984–85 prices, assuming 5 per cent. inflation. There is a proposed reduction of 2·5 per cent. in unit costs in real terms each year during the next few years and the


Secretary of State has confirmed the setting up of separate bus and rail subsidiaries to be operational by 1 April 1985. He has also given LRT responsibility for people with disabilities. That is fine, but we need to know the costs involved.
We have witnessed fare changes which, as the Minister rightly said, rose by an average of 9 per cent. on 6 January 1985. I welcome the fact that she also said that fare levels now are still 10 per cent. in real terms below what they were in 1981. The GLC can be thanked for that. It was that part of the GLC's policy which proved popular with ratepayers in 1981 and, were we to have an election in 1985, would prove so again. There will be no election, of course, so we shall never be able to put the matter to the test. No doubt the Government are greatly relieved at that.
The fare increases from January hide several factors that the Minister did not bother to touch on. The biggest increases were for short distances. The short hop fare, which accounts for 30 per cent. of all fares, rose by 25 per cent., from 20p to 25p. The two-zone travel card increased by 17 per cent. and children's fares rose by 50 per cent., from 10p to 15p. The Minister should not try to throw sand in our eyes as well by trying to suggest that this modest 9 per cent. increase, which is double the rate of inflation at the moment, does not hide a far more serious series of larger increases that affect certain groups of people.
I notice that the fares to Heathrow remained unchanged or were reduced. Why? Can the Minister give a reason? Those are the types of question that the transport chair at the GLC would have had to answer. He would not have been able to get away with it by trekking through a summing up, hoping that we would all go away satisfied. The chair would have been held to account by the committee and the opposition.
The Minister made great play of the success of Capitalcard. I think that she is anticipating something. Capitalcard, despite its fetching jingle that we hear every morning on Capital radio and LBC, has been operating for only a short time. I think that she has got it confused with Travelcard, which was the major reason for the GLC ensuring that LT produced a £35 million operating surplus last year. Capitalcard has only just started and will not be as successful as Travelcard. Let me tell the Minister why. First, it is different from the GLC's scheme, for which £5 million was provided in the London Transport Executive budget for 1984–85. The GLC's proposal was to extend Travelcard to British Rail users at no extra cost.

Mrs. Chalker: At no extra cost to whom?

Mr. Banks: At no extra cost to those who bought the travel card.

Mrs. Chalker: Ah!

Mr. Banks: Of course. There is no such thing as a free lunch, even for Conservative Members. I understand that, and an awful lot of free lunches are eaten in this place. At least the ratepayers of London were able to decide through their elected representatives and the ballot box whether their rates should be used to subsidise cheap travel in London. The Minister knows that it was electorally popular and successful. All the records show that. I admit that it was not free, because there is no such thing as something free in this world. I am sure that if the Government could tax the air they would do it.
In contrast to Travelcard, Capitalcard prices are set at a premium. — [Interruption.] I am delighted that the invisible man has paid us a visit. The Secretary of State may be interested to know that I was trying to explain to the Minister the difference between Capitalcard and Travelcard as she seems to get them confused. He has probably not heard of either.
Capitalcard prices are set at a premium above both Travelcard and the British Rail season ticket rate. Obviously that limits its application to passengers who previously used LRT and BR. Capitalcard is up to 37 per cent. more expensive than the GLC's proposals. It is unlikely to attract many takers because of the premium, and is likely to achieve only limited operating improvements and efficiencies. The Minister must acknowledge those facts. It is no good claiming that Capitalcard will be or is a great success when it has not been operating long enough to be evaluated. She must also accept that it is considerably more expensive than Travelcard, and therefore likely to prove that much more unpopular.
I realise that I am going into great detail, but this is how we used to conduct debates about London transport at county hall. I admit that we had only five minutes in which to put points, but we could return to the subject. Moreover, large numbers of people could make points, and we had a transport committee. Now we have no way of questioning officers and members about policies because our time has been reduced to an hour and a half's debate late on an evening that the Government choose.
There have been many service changes since July 1984. There have been changes to 38 bus routes, and some improvements to the night bus network, which are welcomed. However, major bus service changes are planned for February, and service reductions of 2 per cent. have been announced in LRT's business plan for 1985–86, despite an increase in patronage of 10 per cent. Why on earth LRT plans reductions of 2 per cent. when patronage is increasing, I cannot fathom. Perhaps the Minister will explain when she replies.
The GLC plan for bus mileage in 1985–86 was to be 168 million, but LRT's business plan for 1985–86 envisaged only 164 million. If the GLC had been allowed to continue, bus mileage in the 1987–88 would have increased to 170 million, but LRT's business plan envisages only 159 million. Therefore, there will be a constant reduction in bus mileage in London. That cannot be good news for London's ratepayers. They are faced with a 35 per cent. increase in charges for transport next year, and can look forward to fares increasing by what the Minister called a modest 9 per cent. No doubt it will be a modest 15 per cent. later and a modest 20 per cent. after that—and all the time bus mileages are decreasing.
Finally, when we had a transport Committee where we could discuss such matters, we could also get details of the day-to-day running of London transport. How can we find that out now? The Minister refuses to answer questions about it because it is normal practice for nationalised industries. How is that good for ratepayers and hon. Members? How can we possibly have the democratic accountability that the Secretary of State promised us during discussions on the London Regional Transport Act 1984 if we cannot ask about the day-to-day services of LRT?
Our constituents ask us about bus frequencies—about what has happened to the number 25 or the night service


—and we cannot answer their questions, because the Secretary of State and London Regional Transport refuse to answer such questions. The press and the public used to be able to attend the GLC transport committee's meetings. They could listen to what was said and questions could be asked. Will London Regional Transport let the press and the ratepayers attend its meetings? Of course not. In Committee on the London Regional Transport Bill, the Secretary of State would not accept an amendment to allow the press and the public to attend LRT's meetings.
The Minister should not try to kid us that this miserable, squalid one-and-a-half-hour debate that the Government have so generously provided is any substitute for the democratic accountability of London Transport as it used to be run under the wisdom, the good guidance and the economic efficiency of the Greater London council.

Mr. Simon Hughes: This is a funny business indeed. When one considers the figures—I have examined the Minister's contributions in Committee on the London Regional Transport Act—one discovers that, last year, the Minister said that the ratepayers' contribution to the subsidy to London Transport was about 70 per cent. This year, under this order, the ratepayers' contribution will decrease to 65·63 per cent. Those percentages are directly comparable. However, to a great extent, the ratepayer is the user, and the fares will increase by 9 per cent. We are always being told that the total budget of London Regional Transport is decreasing, yet we are told that the service of London Regional Transport is increasing and that the contribution is producing a better return. The figures do not make sense.
This is another example of the House not being told clearly what the position is, and of the Minister and her Department adding another sorry chapter to the saga of their muddled dealings with London Regional Transport. My party and I have opposed from the beginning the concept of taking London Transport, uniquely in Britain, out of local democratic accountability into the hands of the Government, thus making a nationalised industry out of a local transport system. We opposed the Bill in Committee. We did not defend uncritically the position of London Transport, but at least it was run by people who were elected to run the service. We could have sacked the transport authority if we did not like what it was doing. In 1981, when the elections for the GLC were last held, transport was a major issue and the cheap fares policy was a determining factor in the success of the present administration.
Under the new situation, I am one of the people who reside in London boroughs whose rate will be levied by the Secretary of State, not by a group of councillors whom I can elect. I have no power to elect or to sack the Secretary of State. Therefore, I will be taxed, as will other hon. Members who are London ratepayers, by the Secretary of State. He will add to my burden as a ratepayer. I already have one such burden because of an historical anomaly —I must pay money for the Metropolitan police through an official on its behalf. Again, I have no say in that. I pay my rates to other authorities after democratic decision and, inasmuch as the Government have not inhibited it, democratic debate.
There are no other ways than this debate in which we can express our views. We cannot amend the proposals.
We either take them or leave them. There is no option. The problem over that is that there is no real accountability or any real responsiveness to the needs of the consumer and the ratepayers. But what is far worse is that we are being asked to decide on the budget for the next financial year before the Secretary of State has sorted out his budget for this year. Next week we were to debate the London Regional Transport (Amendment) Bill, yet the Secretary of State is still sorting out, because of a mistake he made, the budget for this year. How one can calculate, plan and organise the budget for next year when one does not know what this year's budget is may strike some hon. Members as somewhat bizarre. Even most creative accountants might find that difficult to comprehend.
The reality is that the Secretary of State went to court, where the judge declared that he had acted illegally and had exceeded his powers. He did things that he could have avoided doing if he had taken our advice in Committee, but he chose not to do so because he and his colleagues knew best. Even though the Secretary of State gave notice that he was going to appeal against that decision, eventually he backed down. It is an important constitutional principle that the Secretary of State should not come before this House to request it to pass this order assuming, when he has no constitutional right to do so, that the London Regional Transport (Amendment) Bill will be passed.
I seem to remember that the same Secretary of State introduced the Civil Aviation Bill. It did not appear to get very far. It failed on take-off. It might just be that his little London Regional Transport (Amendment) Bill does not get through this House and the other place unamended. It could be that hon. Members do not like the idea of retrospective legislation—to correct mistakes that only the Secretary of State and his Department have made. If that is the case, we shall tonight be deciding on a budget for next year when no budget has been finalised for this year. As has been said, this is unconstitutional and, in London Transport terms, without precedent. In the past we went through a democratic procedure. We were able to look at figures and to listen to debate which has been open to the public. We did not have a little draft order which provided no explanation and no relevant figures. We are being asked to give a blank cheque to the Secretary of State without knowing the state of his current account.
I ask the Secretary of State, or his Minister of State, whether they might not accept that in law, order and constitutional propriety they should withdraw this draft order until they have been able to get through Parliament other legislation relating to this year's budget. If they get that legislation through the House—I hope they do not —then let them come back with the order that we are considering tonight.
I have already made the point that this is taxation without representation, which as a matter of principle, is unsatisfactory. It is also pretty high taxation. It will increase the amount that ratepayers will be contributing to London Regional Transport. On the other hand, we are being asked to pay more in fares. The hon. Member for Newham, North-West (Mr. Banks) and other hon. Members will be aware that the figures do not add up. By this order, the Secretary of State will levy £212 million from ratepayers. He is also going to add the £69 million, as the hon. Member for Crewe and Nantwich (Mrs. Dunwoody) said, that the GLC will have to find to cover their outstanding debt resulting from capital projects, debt


which the Government would not take over, although they wanted to nationalise London Transport. They would take over the advantages but they would not take over the disadvantages.
Therefore the bill, as has been said, will be £281 million. This is higher than the bill would have been if the Greater London Council were running London Transport. It had a three-year plan and announced its figures. Therefore the Secretary of State is planning to outspend the council that he decided to replace. Unless the Secretary of State intends to practise more creative accounting, the cost is increasing, even though in Committee day after day, week after week, month after month he kept saying that the Government were going to make London Regional Transport more cost-effective. All I can say is that, if that is the way London Regional Transport is to go on, it does not say much for its accounting or for its level of service.
The future of London Regional Transport is shrouded in the normal mist that surrounds all the activities of the Department of Transport under this Administration. The business plan for London Regional Transport is good as far as it goes. I might remind the Secretary of State that if it had not been for pressure from Opposition Members in Committee there would not have been a business plan, because we were not to have such a series of documents with figures when the matter was originally proposed in Committee. There was to be no accountability in advance.
We are also entitled to know what sort of budget is planned for future years. Is it to be a slippery slope downwards with fewer services, more costs and higher fares, or is there to be a turning of one of the corners that the Government seem to reply upon to fulfil their best expectations? [Interruption.] Yes, indeed, they may have to rely on the exchange rate to enable them to do something.
The plan in the business document envisages a cut in revenue support over the next few years from about £190 million to £95 million or £85 million—a substantial cut. Yet we are being told that there will be minimal service reductions and fares increases consistent only with inflation. Nobody has been able to show how that equation can be made, and where the efficiency savings will be found remains fundamentally unclear. It looks as if the Secretary of State and his Department will claim that they will be able to square the circle, but they are not willing to come up with the evidence to support that claim.
London Transport, particularly in the area that I represent, is grossly under-funded. It does not need cuts or higher fares. People need to be charged less so that more people can use the services to generate more revenue so that we can have more capital investment for better public transport, fewer cars, less clogging of our capital city, a better service and generally a city that works.
The signs are that this doubly incompetent start by the Department has no good news for Londoners, whether ratepayers or passengers, and that there is no secure longterm plan for London Transport. If the Secretary of State is determined to go on with this half budget and creative accounting, I must place on record the fact that he does so against all constitutional standards of decency and propriety and without even coming to the House to tell us his reasons.
Unless we hear his reasons before the end of the debate, not only will we have to vote against the order tonight but

we will be required to point out to the public that the arguments advanced last year were a con and that the Secretary of State has not done any of the things that he maintained he would achieve in his stewardship for London Transport and its users.

Mr. Nigel Spearing: My hon. Friend the Member for Newham, North-West (Mr. Banks) explained vividly the difference between the review of London Transport's activities and its future prospects that one might expect in a debate in county hall and in this brief debate. What he did not mention—I make no complaint about it—is that the supervisory function has passed from professionals responsible to councillors at county hall to civil servants in Whitehall accountable to the Secretary of State, who is accountable to the House.
I recall asking a question when the London Regional Transport Act 1984 was being debated about the number of people additional to those already in the Department of Transport who would be needed to administer the affairs of London Regional Transport. If I recollect correctly, the answer was in excess of 20 and perhaps up to 50. Perhaps the Minister will tell us the number. I think the answer was that the equivalent of at least 20 full-time people would be required in Marsham street.
I wish to emphasise the point made by my hon. Friend about the effect of the capital arrangements. He said that the Minister is requiring London Transport to get its capital requirements out of money levied by rates. If that is true, and the Minister must either deny it or agree to it, it means that there is a tax on transport in London paid by the ratepayers because they are paying more than they would under alternative methods of paying for that capital. If I have it wrong, I am sure that the Minister will correct me, but is she cannot, and if the Secretary of State for Transport is doing what the Secretary of State for the Environment is doing to sewerage and water supply, we are having to pay more for transport than we should be doing. This is the Government who say that they wish to reduce rates. Therefore the Government are being double-faced, if that is their position.
The Minister mentioned improvements to interchange. I warn her that if London Regional Transport or others trumpet the improvements for interchange such as that trumpeted in a recent article in the Sunday press, saying that there will be through-running between, for example, Paddington and the City, they should bear in mind that when that railway was built well over 100 years ago, it was built with through-running in mind. Such improvements are not improving absolutely, but only reverting to services of yesteryear. Any puffed-up, jumped-up exaggerations such as this will be viewed for what they are worth.
London Regional Transport and the Minister will have to face a major problem in the next few years, which hitherto has not received the attention that it deserves. That is the trend of employment in central London, and the effect that that will have on London transport, its finances and the quality of life in London. Some time ago, I asked the Department of the Environment to estimate the amount of empty office space in the Cities of London and Westminster, and in the rest of the GLC area. It did not reply because it said that such figures were not collected, and it would not collect them.
Another Bill, which we are considering in Committee, will destroy the strategic planning responsibility of the GLC, and put in its place an advisory planning commission to the Department of the Environment. I invite the Minister, the Secretary of State for Transport, and the Secretary of State for the Environment to have a look around the City and the West End to see the number of boards up saying, "To Let" and "For Sale". They are extraordinary and unnerving in number. There have not been such hoards in the City of London in living memory, and they are now sprouting in every back and main street in the City and the West End. There is a rapid emptying of office space, which means that the numbers of people working there, and the numbers of people travelling to work, are going down, quite apart from the electronic revolution, about which we have all heard, and the effects that that will have. This will mean that there will be much less use of work journeys on London Transport in the coming years. All this will make a great difference, as it will change the income that LRT derives from this important source. Inadequate machinery will have to face this challenge. In wishing to break up the GLC—the Secretary of State may not achieve this aim — its strategic planning function and the interlocked relationship with the administration of London Transport, we shall be in great difficulty. I am not convinced that the Government's plans, as instanced by Capitalcard, will help. We could have had a good scheme with the Capitalcard, because London's railways operate for between 15 and 18 hours a day, irrespective of demand. It would have been beneficial to have costed that card in a way that would have enabled the transport system to be used to its maximum capacity. I believe that the Minister of State and the Secretary of State should at least modify their structural plans so that the flight of work from central London and the West End is reversed, so that it is worth while for people to work in and sometimes to live in central London, and so that our capital resources are used to the maximum extent. Unless the Ministers do this, they will not use the existing resources to their maximum and will not encourage all aspects of London — be it shopping, entertainment, leisure or visits to friends and relations—to the maximum extent. We shall, therefore, not use the facilities that were available in pre-1914 London to the maximum extent. The relationship between transport and social use makes public transport what it should be.
This debate is an instrument to deal with the finances of, and matters involved in London Transport. I have sketched out the strategic problem only briefly. I believe that the Minister of State should examine these aspects, because, although we deplore the Government's policies, at least, with a bit of warning, we should be able to examine this matter so that when we consider the next levy order in a year's time, we shall not only comment on and oppose the order but examine how well Ministers are discharging their trust and responsibility for the type of methods that I have outlined.

Mr. Jeremy Corbyn: I should like to endorse the comments of my hon. Friends the Members for Newham, North-West (Mr. Banks) and for Newham, South (Mr. Spearing) that it is undemocratic for London's transport matters to be decided in an hour-and-a-half debate when Conservative Members do not represent

London constituencies and chatter their way through the debate. If they wish to continue their discussions, the bars are still open, and I am sure that the bars would welcome the trade. The issue of democracy in London transport deserves far greater attention in the House that it is likely to receive tonight or at any other time.
I refer to the points that many hon. Members made day after day, week after week, during the Committee stage of the London Regional Transport Bill. We pointed out that about 55 per cent. of households in London owned cars. In the poorer areas of London, which are represented by the Opposition the rate of car ownership falls to 40 per cent., 30 per cent. and, in some cases, to less than 25 per cent. That means that often 75 per cent. of all households rely on public transport for their transport needs. In those households that have access to a car, usually one person —a man—has access to the car. Women are, therefore, reliant entirely on public transport. Those arguments washed completely over the Secretary of State. He did not seem to comprehend what we were talking about.
We suggested to the Secretary of State that membership of the London Regional Transport Authority should reflect the high percentage of women users of transport, and the needs of the disabled, the minority ethnic communities and the elderly. The right hon. Gentleman dismissed those ideas out of hand. On taking over London Regional Transport, the right hon. Gentleman's first act was to sack most members of the board, especially those who had been appointed by the GLC because they represented specifically those types of interests. At one stroke he showed his contempt for the majority of the people of London who are users of London Regional Transport Authority services.
There is a further inadequacy about this type of debate. While we are discussing the London regional transport levy for the forthcoming financial year we ought to be discussing the Secretary of State's other plans for transport in London. It is inextricably linked with road planning, lorry bands, ring ways, motorways and airport development. But, no, we are restricted to discussing the London Regional Transport Authority levy while the same Secretary of State has cast a pall and a blight over a very large part of London by his proposals for studies for new road building schemes through east London, north London, south London and other places. These issues ought to be debated along with the levy.
We are going down a ludicrous path in London, contrary to the movements in transport thinking in every other city in the world. We seem to be blessed with a Secretary of State—

Mr. Tony Banks: Cursed.

Mr. Corbyn: My hon. Friend says "cursed" and he is quite right. We are cursed with a Secretary of State who has no vision whatsoever of how most people live and work in London; who has not the slightest understanding of how people get around and, judging by his various idiotic remarks about one-way systems which should be abolished, traffic lights which should all be permanently on green and parking meters which should all be taken away, seems to think that one can continue to encourage commuter motoring in and out of central London and then be surprised that there are traffic jams and when people suggest to him that it is not such a good idea to demolish homes and businesses to make way for roads but is much


more efficient to put people on buses and trains at a price they can afford, as was happening when the Greater London council had control of London's transport but is not happening now.
There was a short period after the Fares Fair scheme was introduced when the use of buses in London increased for the first time for many years, the number of people travelling on the underground increased and the number of people interchanging on to British Rail increased. But the Secretary of State could not stomach that, so he passed his nasty little Bill, which brought great danger to the streets of London and encouraged more cars and more lorries to come on to the streets of London. So we end up with the sort of ludicrous position that we are in tonight.
I hope that when the Minister replies—if he or she can be bothered to listen to some of the questions that are being put, because their attitude shows that they hold a lot of Londoners in great contempt—he or she will answer some specific questions.
First, how many bus routes will be cut during the next year from the London Regional Transport Authority's timetable? Secondly, how many miles of bus route will be lost in the forthcoming year? Thirdly, will they give us an undertaking as to what the fare increases will be in the forthcoming year and the year after? Will they also tell us what estimate they have made of the cost to the public purse of bringing in one-person-operated buses? With his rather curious ideas of efficiency, the Secretary of State seems to believe that it is more efficient to sack the bus conductors in order to make the buses slower, thereby creating a greater traffic jam and also making the buses considerably more dangerous, particularly for women passengers at night. It is something that he might not understand because I do not suppose that he or the hon. Lady travels on the buses late at night or at any other time. I suggest, however, that they consider the fear that is going through the minds of many people who are employed by the London Regional Transport Authority at the moment: those conductors who are about to lose their jobs—550 in the next month; the 3,800 jobs on London Transport that are due to go by the end of 1987; and the threat of privatisation that hangs over the London Regional Transport workshops, the maintenance gangs, the building department and all the other departments that have loyally served London Transport and given us a very good and potentially extremely efficient transport system throughout London.
But the Secretary of State flies in the face of all logic about London's transport needs, road planning requirements and the future needs of Londoners. He seems hell bent on driving more roads and motorways through London, taking buses off the roads and taking trains off the rails. He wants to cease to give the support that is needed to British Rail and to London Transport trains.
The elderly suffer who cannot find a bus to travel on while they still have a bus pass. The Government might tell us what plans they have for the bus pass for the elderly and whether they intend to extend the concession to British Rail trains. Another group which suffers are those who live in inner city areas who have no possibility of being able to buy a car or of being able to travel on any form of public transport other than buses. They have to rely on LRT and they are being treated to every-decreasing services, ever-lengthening bus queues and an ever-more expensive

service. In the end it is not the Secretary of State or other Ministers who suffer, for they ride around in chauffeur-driven cars—[Interruption.] This is an example of the sort of debate that ensues when a group of public school hooligans, who find that they have nothing else to do, wander into the Chamber in the middle of the night merely to demonstrate their contempt for those who cannot afford to buy and run a car and who need a bus service to allow them to travel in London.
The evil days of this Tory Government are numbered. When the Government have been removed from office, a democratically elected Government will take their place. A Government will be elected who are determined to provide for the needs of all the people in London and our other major cities by establishing a decent, cheap and safe public transport system. The Secretary of State and his sidekick have shown themselves completely unfitted, unsuited and incapable of providing such a system.

Mrs. Chalker: With the leave of the House, Mr. Deputy Speaker, I shall reply to the debate. I have rarely heard such a lot of clap-trap as that which came from the hon. Member for Islington, North (Mr. Corbyn). In that respect he even put the hon. Member for Crewe and Nantwich (Mrs. Dunwoody) in the shade.
A number of false remarks have been made, as one would expect in this debate. I exclude the hon. Member for Newham, South (Mr. Spearing) from that remark, because he made an important contribution on future strategic planning. He asked me to consider what he said, which, as he knows, I shall do most carefully. He knows as well as I do, however, that no one can look into a crystal ball to ascertain the form of future transport planning. Instead, we can examine the developments that are taking place and put resources and capital investment into schemes such as the docklands light railway, which is being undertaken by LRT with the London Docklands Development Corporation. We can provide for those areas that are to be expanded in future. That is exactly what LRT is required to do and is doing. Indeed, it is progressing ahead of its schedule.
I shall not go wider than that because on this order—the hon. Member for Crewe and Nantwich seemed to believe that it was part of a Bill which is to be brought before the House next week—there is a good deal to be said. I agree wholeheartedly with the hon. Lady that the order is complicated. However, it is important to get the basis of fact absolutely right, and that I shall seek to do in my answers to the hon. Member for Newham, North-West (Mr. Banks).
First, I ask the House to remember something that I said in my opening remarks. Between 1970—when the GLC first became responsible for the running of London Transport — and 1985, total grant from taxpayers and ratepayers rose from £6·5 million to £400 million. That is where the problem had to be tackled. We were faced with a problem of upward spiralling costs with no great improvement in the service for those who needed to travel. We must also understand in this difficult calculation what figures we are considering. I shall try to follow through on the same figures that the hon. Member for Newham, North-West used, and explain where and why we differ.
First, he was busy claiming that the precept by the GLC for London Transport for 1984–85 was a total of £208 million, which was lower than the Government's proposed


levy of £212 million from the ratepayers for the coming financial year. Let me explain why the GLC's calculation is different from the Government's in two important respects. The hon. Gentleman claimed that 35 per cent. more would be paid by ratepayers in the following year, but this is wrong. The GLC has assumed debt financing for capital investment rather than the pay-as-you-go financing that LRT will use. The GLC has also allocated a disproportionate amount of transport supplementary grant to London Transport as compared with other transport services. The effect of doing that is to use debt financing to spread the costs of capital investments over a longer period. The charge on the ratepayer is reduced in the current year when the GLC is responsible for the precept, but in the long run the large debt charges incurred are met in future when the levy is raised by the Government on the London ratepayer through the London Regional Transport legislation. In the longer term, the borrowing thus becomes more costly.
The GLC this year has claimed the credit for keeping down the transport precept. How has it done this? It switched that £300 million of external debt from housing to transport in December 1983. Now it seeks to blame the Government for the debt charges that have resulted from the policy.
The GLC cannot have it both ways. If it says that it borrowed to finance LRT, it has to bear full responsibility for landing ratepayers with debt charges to finance unprofitable investment. That is in marked contrast to the debt-free condition in which London Transport was transferred to the GLC in 1970.

Mr. Tony Banks: I am grateful to the Minister for taking time to explain the difference. She has not said that the GLC's figures are wrong, but that there is a difference. The big difference is the way in which the Government now want to finance capital borrowing. It is normal, in local government she must accept for one to spread capital costs over a period of years rather than to pay for them all in the one year. Who would buy a house and pay for it in one year? Some Conservative Members might be able to afford to do so, but the majority of ordinary people do not finance their borrowing in that way.

Mrs. Chalker: The hon. Gentleman can argue as hard as he likes about this, but what the GLC would do by its manner of financing is to put up the overall cost of borrowing, and that is an additional cost that would have to be paid for by the ratepayers of London in the years ahead.
In addition, the GLC has also attributed £100 million of the total transport supplementary grant of £142 million in the current year to London Transport. That is disproportionate, given its responsibilities. That is why I said earlier that, on a pro rata basis of allocation of transport supplementary grant between LT and the other services, the GLC received roughly £76 million towards its total budgeted grants to LT of £339 million. The remaining £263 million fell to be funded by the ratepayers. That is about £50 million more than the proposed levy for the 1985–86 equivalent of a 2·5p rate.
The hon. Member for Newham, North-West went on to ask about the £69 million to service the historic debt for London Transport in addition to the new Government levy. This is all part of the GLC's total historic debt. It is that which the GLC has recently chosen conveniently to

call public transport. That is the £300 million of which I spoke a moment ago. It is the only institution of which I can think that could possibly seek to hold someone else responsible for the debts that it has incurred.
The hon. Gentleman then claimed that because there was a £208 million rate precept in 1984–85 that meant there was a 35 per cent. increase in the coming year. Since the new board of LRT took over we have managed to allow the capital grant provision to be increased by about £45 million at a time when the revenue support has been reduced by the productivity and efficiency of LRT. That has brought the total grant down by more than 15 million. On a comparable basis, that is why I have said before and say again tonight that the proposed levy is £50 million less than the GLC's budgeted grant to LRT in 1984–85, which fell to the London ratepayers to finance.
The hon. Gentleman made a number of remarks—and attributed things to me that I have not said, but that is not unusual — about Capitalcard. He sought to say that the fare changes in January were unreasonable. I said that Capitalcard is better and cheaper than the alternative—

Mr. Tony Banks: On a point of order, Mr. Deputy Speaker. I do not wish to draw any unfavourable comparisons, but in a debate on London Transport in county hall the chairman of the council would have drawn to order members who were shouting so that one could not hear the speaker.

Mrs. Chalker: Capitalcard is cheaper than the alternative British Rail point-to-point season combined with LRT's Travelcard. I have never said, on a one-for-one basis, that the Travelcard was not a good idea. Of course, it gives good value. The point is that the Capitalcard, which gives good value for money, is already proving popular and will, I am sure, continue to be a great success. It preserves the element of public choice and ensures that the costs are borne by those who benefit. The new card was introduced as an additional facility for the benefit of travellers at no additional cost to the ratepayers and taxpayers, which was unlike the proposal that the GLC was considering.
A number of hon. Members have made other claims about fares. The hon. Member for Southwark and Bermondsey (Mr. Hughes) did not agree with the figures that I gave in response to his intervention. Those figures were correct. The percentage contributed by the ratepayers through the GLC grants to LRT was 75 per cent. out of a total of £340 million. In the next year, 1985–86, London ratepayers will contribute 65·6 per cent. out of a total of £323 million. When the hon. Gentleman reads the record he will see why and how my earlier figures were correct.
The hon. Member for Newham, North-West commented on short hops on buses being more expensive than the 9 per cent. overall increase. Where there is fare staging in 5p and 10 stages, obviously some increases will be greater than the specific 9 per cent. That is why I have always said an average of 9 per cent. Some will increase by more than others, some will remain steady, while some will increase by less than the average. The Government have asked LRT—and I am confident that it can maintain this—to keep peak fares broadly in line with prices generally and with fares on British Rail's London services. It shows every sign of doing that and giving the passenger a good return.
The demand for bus services is expected to decline, not because of the short-term effect of the fares increase but


because of the long-term changes in the market. There are shifts in car ownership and population. Wherever a service seeks to meet the demands on the ground there will be changes.
The hon. Member for Newham, North-West asked about specific bus changes. A maximum 2 per cent. in service levels for 1985–86 will reflect the decline in demand but the encouragement for new types of services and the bidding for provision of services under the London Regional Transport Act is encouraging. We shall see total public transport mileage by road increase provided that demand is stimulated by flexibility and the development of new routes as well as new kinds of services.
Measures to improve service reliability are important. That means that we must get rid of the lost mileage and LRT says that it can reduce lost mileage from 5·1 to 4·8 per cent. Therefore, there will be an improvement in the average waiting times, which is much wanted. The hon. Gentleman also compared the three-year plan and LRT's annual business plan. The provision of information, both through the annual plan and the other methods, is plentiful. In addition, plenty of information is available through the London regional passenger committee.
We have sought, in presenting the levy to the House, to be fair to ratepayers in London because it represents good value for money and LRT's management is now on course to giving passengers and ratepayers better value in the future. That is in sharp contrast to what has occurred. The GLC's policies would have meant presenting London ratepayers with a bill for £245 million for revenue support alone in 1987–88 before any grant for capital had been allowed for.
I know that hon. Members are concerned about the interests of those who use LRT's services and those who help to finance them. We need to see a balance between those who are paying the fares and those who are paying the rates and taxes. I commend the draft order to the House.

Question put:—

The House divided: Ayes 198, Noes 138.

Division No. 103]
[1.27 am


AYES


Alexander, Richard
Butler, Hon Adam


Amess, David
Butterifill, John


Ancram, Michael
Carlisle, John (N Luton)


Arnold, Tom
Carlisle, Kenneth (Lincoln)


Ashby, David
Carttiss, Michael


Aspinwall, Jack
Cash, William


Atkins, Robert (South Ribble)
Chalker, Mrs Lynda


Atkinson, David (B'm'th E)
Chapman, Sydney


Baker, Nicholas (N Dorset)
Chope, Christopher


Beaumont-Dark, Anthony
Clark, Dr Michael (Rochford)


Beggs, Roy
Clarke, Rt Hon K. (Rushcliffe)


Bellingham, Henry
Cockeram, Eric


Bendall, Vivian
Colvin, Michael


Benyon, William
Conway, Derek


Best, Keith
Coombs, Simon


Bevan, David Gilroy
Cope, John


Boscawen, Hon Robert
Cranborne, Viscount


Bowden, A. (Brighton K'to'n)
Crouch, David


Bowden, Gerald (Dulwich)
Currie, Mrs Edwina


Bright, Graham
Dickens, Geoffrey


Brooke, Hon Peter
Dicks, Terry


Brown, M. (Brigg &amp; Cl'thpes)
Dorrell, Stephen


Buck, Sir Antony
Douglas-Hamilton, Lord J.


Budgen, Nick
Dover, Den


Bulmer, Esmond
Dunn, Robert


Burt, Alistair
Durant, Tony





Eggar, Tim
Merchant, Piers


Evennett, David
Mitchell, David (NW Hants)


Fairbairn, Nicholas
Morris, M. (N'hampton, S)


Favell, Anthony
Neale, Gerrard


Fenner, Mrs Peggy
Needham, Richard


Forman, Nigel
Nelson, Anthony


Forsyth, Michael (Stirling)
Neubert, Michael


Forth, Eric
Newton, Tony


Fox, Marcus
Nicholls, Patrick


Franks, Cecil
Norris, Steven


Fraser, Peter (Angus East)
Onslow, Cranley


Freeman, Roger
Ottaway, Richard


Galley, Roy
Page, Sir John (Harrow W)


Garel-Jones, Tristan
Patten, John (Oxford)


Gorst, John
Pollock, Alexander


Gow, Ian
Powley, John


Grant, Sir Anthony
Renton, Tim


Greenway, Harry
Ridley, Rt Hon Nicholas


Gregory, Conal
Roberts, Wyn (Conwy)


Griffiths, Peter (Portsm'th N)
Robinson, Mark (N'port W)


Ground, Patrick
Roe, Mrs Marion


Hamilton, Neil (Tatton)
Rossi, Sir Hugh


Hampson, Dr Keith
Rowe, Andrew


Hannam, John
Rumbold, Mrs Angela


Hargreaves, Kenneth
Ryder, Richard


Harris, David
Sayeed, Jonathan


Harvey, Robert
Shaw, Giles (Pudsey)


Hawkins, C. (High Peak)
Shaw, Sir Michael (Scarb')


Hawksley, Warren
Shelton, William (Streatham)


Hayes, J.
Shepherd, Colin (Hereford)


Hayward, Robert
Shepherd, Richard (Aldridge)


Hickmet, Richard
Silvester, Fred


Hind, Kenneth
Smith, Tim (Beaconsfield)


Hogg, Hon Douglas (Gr'th'm)
Soames, Hon Nicholas


Holt, Richard
Speed, Keith


Howard, Michael
Spencer, Derek


Howarth, Alan (Stratf'd-on-A)
Spicer, Michael (S Worcs)


Howarth, Gerald (Cannock)
Squire, Robin


Howell, Ralph (N Norfolk)
Stanbrook, Ivor


Hubbard-Miles, Peter
Stern, Michael


Hunt, David (Wirral)
Stevens, Lewis (Nuneaton)


Hunter, Andrew
Stevens, Martin (Fulham)


Jackson, Robert
Stewart, Allan (Eastwood)


Jessel, Toby
Stewart, Andrew (Sherwood)


Johnson Smith, Sir Geoffrey
Stokes, John


Jones, Gwilym (Cardiff N)
Stradling Thomas, J.


Jones, Robert (W Herts)
Sumberg, David


Kellett-Bowman, Mrs Elaine
Taylor, John (Solihull)


Key, Robert
Taylor, Teddy (S'end E)


King, Roger (B'ham N'field)
Temple-Morris, Peter


Knight, Gregory (Derby N)
Thompson, Patrick (N'ich N)


Knight, Mrs Jill (Edgbaston)
Thornton, Malcolm


Knowles, Michael
Tracey, Richard


Knox, David
Trippier, David


Lamont, Norman
Twinn, Dr Ian


Lang, Ian
Vaughan, Sir Gerard


Latham, Michael
Waldegrave, Hon William


Lawler, Geoffrey
Wall, Sir Patrick


Lawrence, Ivan
Waller, Gary


Leigh, Edward (Gainsbor'gh)
Wardle, C. (Bexhill)


Lennox-Boyd, Hon Mark
Warren, Kenneth


Lilley, Peter
Watts, John


Lloyd, Peter, (Fareham)
Whitfield, John


Luce, Richard
Whitney, Raymond


McCrindle, Robert
Wilkinson, John


McCurley, Mrs Anna
Wolfson, Mark


MacGregor, John
Wood, Timothy


MacKay, John (Argyll &amp; Bute)
Woodcock, Michael


Maclean, David John
Yeo, Tim


Maginnis, Ken
Young, Sir George (Acton)


Major, John
Younger, Rt Hon George


Malone, Gerald



Mather, Carol
Tellers for the Ayes:


Mayhew, Sir Patrick
Mr. Archie Hamilton and


Mellor, David
Mr. Tim Sainsbury.




NOES


Alton, David
Banks, Tony (Newham NW)


Anderson, Donald
Barnett, Guy


Atkinson, N. (Tottenham)
Barron, Kevin






Beckett, Mrs Margaret
Leighton, Ronald


Beith, A. J.
Lewis, Terence (Worsley)


Bennett, A. (Dent'n &amp; Red'sh)
Litherland, Robert


Bidwell, Sydney
Lloyd, Tony (Stretford)


Blair, Anthony
Lofthouse, Geoffrey


Boyes, Roland
Loyden, Edward


Bray, Dr Jeremy
McDonald, Dr Oonagh


Brown, Gordon (D'f'mline E)
McGuire, Michael


Brown, N. (N'c'tle-u-Tyne E)
McKay, Allen (Penistone)


Bruce, Malcolm
McKelvey, William


Buchan, Norman
McNamara, Kevin


Caborn, Richard
McTaggart, Robert


Callaghan, Jim (Heyw'd &amp; M)
McWilliam, John


Campbell-Savours, Dale
Madden, Max


Carlile, Alexander (Montg'y)
Marek, Dr John


Clarke, Thomas
Marshall, David (Shettleston)


Clay, Robert
Maxton, John


Clwyd, Mrs Ann
Maynard, Miss Joan


Cocks, Rt Hon M. (Bristol S.)
Meacher, Michael


Cohen, Harry
Meadowcroft, Michael


Concannon, Rt Hon J. D.
Michie, William


Cook, Frank (Stockton North)
Mikardo, Ian


Cook, Robin F. (Livingston)
Millan, Rt Hon Bruce


Corbyn, Jeremy
Miller, Dr M. S. (E Kilbride)


Cowans, Harry
Morris, Rt Hon J. (Aberavon)


Cox, Thomas (Tooting)
Nellist, David


Cunliffe, Lawrence
O'Brien, William


Cunningham, Dr John
O'Neill, Martin


Dalyell, Tam
Orme, Rt Hon Stanley


Davies, Ronald (Caerphilly)
Park, George


Davis, Terry (B'ham, H'ge H'l)
Parry, Robert


Deakins, Eric
Patchett, Terry


Dormand, Jack
Pike, Peter


Dubs, Alfred
Prescott, John


Dunwoody, Hpn Mrs G.
Randall, Stuart


Eadie, Alex
Redmond, M.


Eastham, Ken
Rees, Rt Hon M. (Leeds S)


Evans, John (St. Helens N)
Richardson, Ms Jo


Ewing, Harry
Roberts, Allan (Bootle)


Fatchett, Derek
Roberts, Ernest (Hackney N)


Fields, T. (L'pool Broad Gn)
Robertson, George


Fisher, Mark
Robinson, G. (Coventry NW)


Foot, Rt Hon Michael
Rogers, Allan


Forrester, John
Rowlands, Ted


Foster, Derek
Sheerman, Barry


Foulkes, George
Shore, Rt Hon Peter


Fraser, J. (Norwood)
Short, Ms Clare (Ladywood)


Freeson, Rt Hon Reginald
Skinner, Dennis


George, Bruce
Smith, C.(Isl'ton S &amp; F'bury)


Godman, Dr Norman
Snape, Peter


Golding, John
Soley, Clive


Hamilton, James (M'well N)
Spearing, Nigel


Hardy, Peter
Steel, Rt Hon David


Harman, Ms Harriet
Stott, Roger


Harrison, Rt Hon Walter
Strang, Gavin


Haynes, Frank
Straw, Jack


Hogg, N. (C'nauld &amp; Kilsyth)
Thompson, J. (Wansbeck)


Holland, Stuart (Vauxhall)
Wardell, Gareth (Gower)


Home Robertson, John
Wareing, Robert


Howells, Geraint
Welsh, Michael


Hughes, Robert (Aberdeen N)
Williams, Rt Hon A.


Hughes, Sean (Knowsley S)
Winnick, David


Hughes, Simon (Southwark)
Woodall, Alec


Kaufman, Rt Hon Gerald
Young, David (Bolton SE)


Kennedy, Charles



Kirkwood, Archy
Tellers for the Noes:


Lamond, James
Mr. Don Dixon and


Leadbitter, Ted
Dr. Roger Thomas.

Question accordingly agreed to.

Resolved,
That the draft London Regional Transport (Levy) Order 1985, which was laid before this House on 17th December, be approved.

PETITION

Human Embryos

Mr. Simon Hughes: I beg leave to present, on behalf of nearly 1,500 residents of my constituency and neighbouring areas, a petition for the protection of the human embryo. It was presented to me recently at one of my advice centres by a large number of the people whose names are appended to it. It is signed by many of my constituents, including many people associated with local churches and with hospitals, including Guy's hospital, and many personal friends of mine.
The petitioners affirm their belief that the newly fertilised human embryo is a real, living, individual human being. They oppose all practices that discriminate against the embryo and violate his or her human dignity and right to life.
I know that this petition is one of many, and that all the petitioners are looking forward to the debate on the subject that will take place at the end of the week. Therefore, the petition is presented at an especially opportune time.
The petition ends:
Wherefore Your Petitioners Pray that the House of Commons will take immediate steps to enact legislation which forbids any procedure that involves purchase or sale of human embryos, the discarding of human embryos, their use as sources of transplant tissue or as subjects for research or experiment … And your petitioners, as in duty bound, will ever pray etc.

To lie upon the Table.

International Fraud

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Peter Lloyd.]

Mr. Richard Ottaway: The major international commercial and maritime frauds of the 1970s and 1980s have shown up the alarming deficiencies in the criminal codes of the countries involved. The codes were drawn up before the explosion in modern technology, especially in communications, and have proved to be woefully inadequate in bringing offenders to trial and ensuring that justice is done and seen to be done.
There is no doubt that international marine fraud has been carried out worldwide, the primary victims being less sophisticated Third world countries. It is now reaching epidemic proportions. A few years ago, Lloyd's estimated that marine frauds cost it £100 million a year. Figures released by the International Maritime Bureau this week show that the maritime nations have been defrauded of $13 billion a year — more than the cost of Trident, about which there is so much hullabaloo and the cost of which is spread over 20 years.
It has been asserted that the major reason for maritime fraud being the nearly perfect crime is its international nature. I should like to quote Mr. Eric Ellen, the chief executive of the International Maritime Bureau who has said:
The diversity in today's fraud affects virtually all parties to an international trade transaction, with the involvement of anything between four and ten countries, thus hampering investigation, extradition and prosecution of offenders.
Maritime fraud takes many forms. There is documentary fraud, involving payments made on forged documents, charter party fraud, in which the fraudster disappears with freight, simple deviation of a ship to sell a cargo in a remote port and fraudulent insurance claims. International non-marine fraud is just as devious, crossing international frontiers and going through many bank accounts, often aided by new technology which makes the task of detection, let alone prosecution, more difficult.
It has become blindingly obvious to me that there are extreme deficiencies in international codes for bringing the perpetrators of these frauds to trial, either through inherent limitations on national police and prosecution forces or by legal immunities nationally or internationally. Fortunately, the world has woken up to the epidemic proportions of the difficulties. In February last year, the United Nations Conference on Trade and Development convened a conference in Geneva to get to grips with the problem. After a few initial difficulties, there was an unusually harmonious meeting. The agreed final resolution called for action on a national, international and international organisation basis. Although the international organisations are taking positive steps to get to grips with the problem, I should like to concentrate on the contribution that Governments can make on the national and international front.
The first part of the UNCTAD resolution called on national Governments to tighten their legislation to ensure that effective measures are available to prevent maritime fraud, to investigate such fraudulent acts and to prosecute persons who commit such fraud. In that regard, I have three suggestions. First, the Home Office should look to greater national co-ordination of regional police forces. If a major maritime fraud is unearthed in a remote port, the

regional police force investigates. Without any disrespect to the regional police force, there is often too little local expertise in investigation of major frauds. There is no central co-ordination such as there is in anti-drug-running organisations. Serious consideration should be given to establishing a federal agency to fight crimes of this type.
Secondly, there are deficiencies in our prosecuting policy. Although not officially admitted, it seems to be the policy of the Director of Public Prosecutions not to bring actions against criminals engaged in fraud when they are foreign nationals and when the victims are also foreign nationals. It was reported in the press only recently that German nationals in the United Kingdom are soliciting investors in Germany, then defrauding them of their money when they invest it over here and that the DPP is not prosecuting those fraudsters, because Germans are fleecing Germans. It seems that the only steps that the police are prepared to take are those necessary to hold them for extradition purposes. With Germany, that is a possibility, but with Spain and many other countries with which we have no extradition treaties, that is impossible.
The matter boils down to a simple question, which is whether we are prepared to prosecute other people's criminals. There is one overwhelming reason why we should. The City of London is the financial service centre of the world. With the decline of our manufacturing industry, the contribution it makes to the economy in its invisible exports and earnings is now significant. I do not blame the DPP for his present attitude, because he does not have the money to investigate crimes committed overseas, as the Federal Bureau of Investigation in the United States has. However, the Government should consider using some of their mammoth earnings from the City to step up policing, in a serious attempt to eradicate from these shores those who see the United Kingdom as a haven from prosecution, whatever their nationality. I am sad to say that in the recent White Paper on investor protection the difficulty of international operations and protecting overseas investors was ignored.
There is a substantial lacuna in our law of jurisdiction. In many cases the DPP, even if he wanted to commence a prosecution and could prosecute an offender in the United Kingdom, could not bring a prosecution because of the location. If the Minister and I were to conspire to commit a crime in the United Kingdom we would be prosecuted whether we committed it or not. However, if we conspired to sink an over-insured vessel outside territorial waters and to claim against Spanish underwriters, it would not be a crime. As we do not have an extradition treaty with Spain, the Spanish authorities cannot extradite us to Spain.
In the past, jurisdiction laws have been found to be inadequate. As a result of certain conventions, universal jurisdiction is now claimed for crimes against international order, such as terrorism. Similar claims have been made in respect of specific crimes such as drug trafficking. In the circumstances I hope that the Minister will refer that point to the Law Commission for review. After all, to quote the words of a leading judge:
It would be of no benefit to this country if it became a sanctuary for conspirators provided only that they concluded their unlawful plots abroad.
The second part of the UNCTAD resolution calls for action at intergovernmental level to examine in depth the various proposals put forward before and during the UNCTAD meeting, which included the possibilities for


international co-operation in the investigation of fraud and subsequent legal action. If any progress is to be made at that level, the only satisfactory solution would be an international convention on maritime fraud and a parallel international convention on jurisdiction and extradition.
The United Kingdom does not have a good reputation for extradition. The difficulties and frustrations that some foreign states experience when they request surrender of a fugitive from the United Kingdom is exemplified in the case of Spain, which recently tore up a treaty entered into in 1977. Substantial improvements have been made in the extradition climate with the 1984 House of Lords decision in the Government of Denmark v. Neilson, and the Government of the United States v. McCaffery.
Despite those recent decisions, our reputation for extradition is so bad that it is the firm opinion of many leading authorities on extradition that we should sign the European convention on extradition. We stand apart with only Malta, as one of the two countries that have failed to sign and ratify it.
The United Kingdom's reluctance to sign and ratify the convention is due to the requirement of a requesting state that it does no more than submit to the requested state a statement of the offences committed, their legal descriptions, and a description of the person claimed. English extradition law has always required that a requesting state adduces evidence in support of its request of a standard that would warrant committal for trial of an accused, if his offence had been committed in the United Kingdom.
That is a commendable attitude and is in line with that of many states that are reluctant to surrender their own nationals without proper evidence and which have been able to sign the European convention. On signing the convention they take advantage of article 26 by making a reservation that the state requesting the surrender of a fugitive must submit sufficient evidence to establish a prima facie case. Countries such as Denmark, Norway, Sweden and Israel have made such a reservation and their municipal law retains the prima facie case requirement. I understand that a Green Paper on extradition will shortly be published, and I hope that that point will be recognised in the paper and that Britain will be able to sign and ratify the convention. However, signature of the European convention must only be an interim measure. We should work with UNCTAD towards a convention on jurisdiction and extradition for maritime fraud.
It is clear from what I have said that many problems exist and that the current laws on jurisdiction and extradition are inadequate to deal with international maritime fraud. Consideration should be given to linking the extradition obligations to any expanded jurisdiction capabilities so that a state must either prosecute an offender in its custody or extradite him to the requesting state. With such an alternative obligation, the risk of offenders finding refuge from prosecution for lack of jurisdiction, and extradition because of being a national of the state of custody, would be eliminated.
Although at first sight such a suggestion for an international convention on maritime fraud may appear extraordinary, clear precedents can be found in existing conventions designed to cover specific acts. For example, the spate of aeroplane hijacking in the 1960s resulted in the convention for the suppression of unlawful seizure of aircraft in 1970. Some may submit that if a convention on jurisdiction and extradition for maritime fraud is justified,

it cannot be developed in sufficient time to provide relief. In this respect, I draw the attention of the House to the hijacking convention, on which work began in 1969. The diplomatic conference for its adoption took place in 1970, and it came into force in October 1971.
There are many other proposals for combating maritime fraud which an international convention might embrace. The international nature of the problem must be recognised and the national police forces must work together. In this sense, the nations of the world must put together an international co-ordinating organisation. Agencies such as Interpol, while doing an excellent job, are little more than communications centres. We need an international coordinating centre which acts as a fast communications base, an international information exchange, an international register of shipowners and ship movements, and an organisation that will work with national groups towards the elimination of international maritime fraud.
Tonight I have only touched on the tip of the iceberg of this massive subject. The points that I have raised require action from the Lord Chancellor's Department on jurisdiction, from the Department of Trade and Industry on investor protection, from the Foreign and Commonwealth Office on extradition, and last, but certainly not least, from the Home Office on policing. I hope that they will all appreciate that we are fighting a worldwide problem that needs a worldwide organisation to cope with it. The United Nations Conference for Trade and Development deserves a response to its proposals, and I hope that at least the Departments can get together to discuss them.

The Parliamentary Under-Secretary of State for the Home Department (Mr. David Mellor): Notwithstanding the late hour, I am grateful to my hon. Friend the Member for Nottingham, North (Mr. Ottaway) for raising in such a cogent way what is plainly an important subject. Although he represents—unless my geography has wholly deserted me — a landlocked constituency, he has properly drawn our attention to problems on the high seas. Those who read his remarks will be as troubled as he is by some of the points that he made. As I have no doubt his constituents are aware, my hon. Friend is an experienced maritime lawyer, and we have good reason to be grateful to him for bringing his expertise not just to his speech but to the valuable study of maritime fraud that has been carried out under the aegis of the Society of Conservative Lawyers and under my hon. Friend's chairmanship.
My hon. Friend clearly demonstrated many of the problems and said that frauds take various forms, ranging from the purely documentary to the extreme case of scuttling a ship at sea. The illegal act may be the forging of a bill of lading, when the intending buyer of goods discovers that he has purchased a non-existent cargo. Alternatively, the cargo may simply be stolen. I understand that a familiar device is that a ship, instead of going to its destination port, is diverted and the cargo sold at another port. The ship's name is then changed, and it thus becomes untraceable. In some extreme cases, the ships involved in deviation frauds may be reported as sunk, and a further fraud is committed by making a claim on the insurance for the ship and its cargo.
Hon. Members will recall the notorious Salem incident, which was perhaps the most blatant example of that


practice. The ship was chartered to carry crude oil from Kuwait to Genoa on behalf of an Italian trading company which sold the entire shipment to Shell International in mid-voyage. Instead of proceeding to the Mediterranean, the cargo was sold in South Africa and was replaced by sea water to give the impression that the ship was laden. The Salem was then sunk by the crew off the coast of Senegal. It does not take much imagination to see that there is in such criminal activities the potential for very large profits indeed. Certainly when one gets into the position of scuttling a ship and claiming its full insurance value one is dealing with very large sums indeed.
Even recognising that, it still comes as something of a shock to hear, as my hon. Friend rightly reminded the House, that the International Maritime Bureau, a very responsible body, points out that known losses perhaps amounted to as much as £12 billion last year. That is a truly staggering figure. British interests are very much at risk, because particularly in the insurance industry, British interests have been among the worst victims. However, a more insidious factor that may have grave financial consequences is confidence. It has been alleged that a number of these frauds have been engineered partly through the mechanisms of the London markets. Even though in most cases British subjects are not criminally involved, we must be aware of the risk of damage to the City's international reputation.
My hon. Friend referred in particular to the contribution of UNCTAD. Maritime fraud does of course affect trade and we therefore very much welcome the interest that UNCTAD has shown in combating this problem. Its paper analysed the various forms of maritime fraud and the various means of combating it. Its paper formed the basis of a useful discussion by an intergovernmental group which unanimously agreed a number of resolutions calling on Governments and commercial interests to co-operate with each other, exchange information and review laws and law enforcement procedures. We already liaise with the industry on this problem, but the Government will do all in their power to help to provide the information that will be required for the various studies that are being undertaken by UNCTAD.
However, as the resolutions recognise, self-regulation by the commercial interests concerned must play an important and perhaps crucial role in combating fraud. I know that the industry takes this problem seriously and has done a lot of work to try to minimise maritime fraud. The setting up of the International Maritime Bureau is a case in point. I know that the bureau has already played a valuable role—I believe my hon. Friend is of the same opinion—in combating maritime fraud. I am sure it is only when all the parties concerned can get together to consider this problem that maritime fraud will be turned back. It is the provision of a forum in which such parties can meet that has been the most useful role performed by UNCTAD.
As I have said, I have looked with interest at the report of the sub-committee of the Society of Conservative Lawyers which was chaired by my hon. Friend. I have looked with particular interest at those sections directly involving Home Office responsibilities. I see that in its second proposal the sub-committee suggests that the Law Commission should review whether conspiracy in this country to commit a crime overseas should become a

criminal offence in this country. In fact, the Law Commission is engaged at the moment on an extensive review of the law relating to conspiracy to defraud and will present its findings in due course. I hope that the commission will take careful note of what my hon. Friend has said and of the report of his committee before giving us the benefit of its conclusions.
On the general question of conspiracy to commit a crime overseas, and without wanting to pre-empt the Law Commission's findings in any way, I wish to make two points. First, there are considerable evidential difficulties involved in detecting any conspiracy, because clever plots are not hatched in meticulously kept records. Secondly, the law already provides that a conspiracy is indictable in this country when conspirators in England agree to do an unlawful act in England with intent to defraud persons abroad. To that extent, there is not a hiatus in the law. At least, that is my understanding of the case of Regina v. Hornett in 1975, although I appreciate that there is still some difference of view between the committee and Hornett on the ambit of the law and that the committee would wish the law to go further.
I want to take up three other points that were raised by my hon. Friend. Perhaps I should properly begin with police action. It may help if I set out briefly the arrangements for the investigation of fraud by the police and the liaison which exists to assist them. Often there is an interest in the United Kingdom in the investigation of a suspected maritime fraud because of the insurance aspect. Both commissioners of police for the City of London and the metropolis take most seriously indeed their personal responsibility to investigate fraud affecting London's financial institutions. There exists in London a joint fraud squad for the two forces, under the command of a metropolitan police commander. This commercial fraud department has a strength of 204 officers, of whom the 56 City police officers represent nearly half the City police criminal investigation department. This reflects the importance attached in the City to the investigation of fraud where fraud squad officers can be expected to serve in the squad for a seven to eight year period and thus maximise the experience they gain.
One of the difficulties in the successful investigation of fraud—this does not apply just to maritime fraud—is the often complicated nature of the offences. This results in long and resource-consuming investigations, with cases often taking years to come to trial. The House will see the disadvantage of this not only in terms of deterrence but in the difficulties of presenting a successful prosecution case if the evidence is stale and witnesses' recollections are not what they would have been earlier.
To counter this, fraud investigation groups were set up in 1981 on an ad hoc basis in London only, because the majority of commercial frauds occur in the capital. As one of the measures intended to combat commercial fraud, fraud investigation groups were put on a permanent basis and extended to cover the whole of England and Wales with effect from the beginning of the year.
The essential characteristics of fraud investigation groups are simple. Based in the department of the Director of Public Prosecutions, fraud investigation groups have available senior officials from that department, together with those from the Department of Trade and Industry who are concerned with the investigation of offences under companies legislation. They work in co-operation with the police who will be made available as necessary by their


chief officer. Their independence from the main body of FIG provides an operational advantage to the police, in that they retain their full powers as officers under the Crown.
By means of early and continuing liaison between the DPP, DTI and police interests, FIG enables an investigation to be concentrated on the direction which appears most likely to lead to evidence which will meet the needs of the court instead of, as often happened before, each body continuing parallel but separate investigations. With FIG, lines of investigation which are considered to be less likely to succeed are, therefore, better able to be identified at an early stage, dismissed and the investigation concentrated on those lines which appear most likely to produce a manageable and speedily resolved case.
Notwithstanding this development, I think that my hon. Friend may be underestimating the capability of individual forces to respond to maritime frauds reported to them. Our understanding from our contacts with forces around the country is that reports of maritime fraud involving ships physically at United Kingdom ports are fortunately very few: the emphasis is rather on City institutions where insurance is arranged or involving the presentation of false bills of lading. As I have already said the fraud department has a considerable wealth of experience in dealing with such cases, but even if a fraud occurs in a provincial force area we have to recognise that our police forces today are sizeable organisations, most of which have their own fraud squad and who are well aware that it is always open to them to consult the DPP through that office's FIG and fraud divisions for early advice and assistance in the investigation of fraud.
The internationalism of all fraud and particularly of maritime fraud is an acknowledged feature and close liaison on co-operation internationally between police forces is crucial. The International Maritime Bureau and the Commonwealth Secretariat Fraud Unit are two bodies which have a particular interest in such liaison. I am sure that these are valuable initiatives and the self-help which the shipping trade can provide is reflected in the support and success of the International Maritime Bureau; equally the Commonwealth Secretariat Unit can, by virtue of its Commonwealth-wide remit, give assistance through a wide range of countries.
I should also mention the role of Interpol, which has a valuable contribution to make, not only because its membership covers 140 countries throughout the world, but its communication links through its headquarters in Paris to all member countries and the tradition of police to police co-operation on criminal investigation matters which it has over the years built up give the potential for virtually world-wide assistance. Interpol additionally holds regular conferences and working seminars where trends in fraud and the means whereby police action can be improved are discussed and disseminated to all member countries.
My hon. Friend raised important questions of prosecution and enforcement. On prosecution policy, allegations have been made about the reluctance of the Director of Public Prosecutions to bring actions against criminals in this country if the person engaged in fraud is a foreign national and his victims are also foreign nationals. This means that the offender may escape any risk of prosecution in the country where his victims live, because that country may not have any jurisdiction to deal with crimes committed in this country. The DPP's policy

is a matter for him and not for me, but such criticisms do not take full account of the extreme practical and legal difficulties encountered in international crime.
To prosecute in such cases, it is usually necessary to obtain statements from foreign nationals or foreign banks. There is no form of international subpoena by which witnesses may be required to travel to this country to give evidence and it is an extremely difficult task to secure the attendance as a witness in this country of a foreign banker. When there is no loser in this country, it is difficult to secure the evidence here. This does not mean that the DPP is reluctant to act, but it does mean that the difficulties must not be underestimated and the presence of a clear public interest justification for prosecution does not make the director's task any easier.
My hon. Friend rightly spent a great deal of time on the subject of extradition, which is causing us considerable interest at the moment. As he said, international crime has to be tackled internationally, and extradition is an important weapon. It is true that our older extradition treaties are framed in terms that implicitly acknowledge only offences that are committed within the territorial boundaries of countries that are party to the agreements. Our more recent treaties, however, are framed in terms of the respective jurisdiction of the judicial authorities of the parties. As I have endeavoured to explain, the concept of extraterritorial jurisdiction causes difficulties in our law, but our general lack of such jurisdiction does not inevitably make for an enforcement loophole, because in this country we have no objection to extraditing our own nationals, provided that the normal extradition arrangements are met. For the most part, our extradition arrangements are based on bilateral treaties that set out in detail the conditions governing surrender to and from the United Kingdom. At present, there are 43 bilateral treaties in force.
My hon. Friend has pointed out a number of difficulties about our extradition arrangements. He is not alone in his criticisms. He knows that we are taking them seriously, and that is why we shall be publishing a Green Paper shortly. He will be pleased when he sees it, because it canvasses fully and invites opinions, including opinions from himself, and some of the people with whom he has been collaborating on this venture, and he will let us know his views on some of the points at issue.
Plainly, it all centres around the prima facie requirement. It is interesting that my hon. Friend thinks, not that this requirement should be dropped but that we should adopt an alternative way by means of a derogation to sign the European convention. The arrangements reflected in such treaties must be put into effect by application of our law, and the principal statute is the Extradition Act 1870. One of its requirements is that the requesting state has to produce evidence of a standard that would justify the committal for trial of the accused if the alleged crime had been committed in England. This is the centrepiece of the 1870 Act, but its continuation on the statute book causes difficulties in relation to countries such as Spain, which abrogated its treaty with us a few years ago because of frustration at not being able to get extradition of criminals wanted from Spain.
It was said that our standards of proof are too high when not only the nature of the charge is based on Spanish law but the whole means of preparing a case for trial is quite different from our own. That matter will have to be looked


at carefully, not only in the Green Paper but in consideration of representations that will be made as a result of it.
My hon. Friend made an important point about the European convention that he said we should ratify. As he pointed out, we have to consider whether the prima facie requirement is an obstacle to ratification. I know that my hon. Friend considers that ratification would enhance the international community's ability to deal with serious international fraud by bringing London—an important centre for this type of fraud — within the uniform arrangements of a multilateral treaty. My hon. Friend explained his case well, and we shall want to examine that aspect. Although we have not signed the convention, we have taken an active part in its negotiation. The main

obstacle to our accession has been the difficulty of reconciling our criminal law procedures with those of continental countries. To draw closer to foreign practice would entail some fundamental changes in our law. I can offer my hon. Friend the encouragement that a forthcoming Green Paper will discuss the scope for and implications of such changes.
I could say a good deal more. I regret that I have not been able to delve as fully as I would wish into some of my hon. Friend's interesting points. This has been a worthwhile debate, and I hope that some of the points will be taken up in due course, especially those in relation to extradition which will be the subject of intense public debate in the months ahead.

Question put and agreed to.

Adjourned accordingly at nine minutes past Two o'clock.